The Year Americans Did Their Taxes on a Napkin and Moved On With Their Lives

The original federal income tax form, introduced in 1913 when the Sixteenth Amendment first made income taxes permanent, was one page long. It came with a single page of instructions. You filled it out, did some arithmetic, mailed it in, and that was the end of it.

The 2023 version of Form 1040 runs to two pages — but that's before you count the schedules, worksheets, and supplementary forms that accompany it. The IRS's own instruction booklet for the standard 1040 runs over 100 pages. TurboTax, the most popular tax software in America, offers a product tier specifically for people whose financial lives are complicated enough that they need a real human CPA on call.

Something happened between 1913 and now. Several somethings, actually.

When Tax Day Was Just a Tuesday

For most working Americans in the mid-20th century, filing taxes was genuinely simple. If you had a regular job, your employer withheld money from your paycheck all year. At the end of January, your W-2 arrived in the mail. You copied a few numbers onto a short form, checked whether you owed a little more or were getting a refund, and mailed it in.

The whole process took an afternoon at most. Many people did it at the kitchen table after dinner. You needed a pencil, a calculator if you had one, and maybe thirty minutes of focused attention. No software. No accountant. No anxiety spiral.

The short form — the 1040EZ, which the IRS introduced in 1982 and finally retired in 2018 — was genuinely easy. It fit on a single page. It was designed for people with uncomplicated financial lives, which described the majority of American workers. You filled in about a dozen boxes, did five or six simple calculations, and you were done.

People mocked Tax Day as an inconvenience. It was never supposed to be an ordeal.

The Complexity Didn't Happen by Accident

Here's the part of the story that tends to surprise people: the American tax code didn't get complicated because taxes themselves got harder to calculate. It got complicated because Congress kept adding things to it.

Every deduction, credit, phase-out threshold, and special carve-out in the tax code represents a policy decision made at some point by somebody. The mortgage interest deduction. The child tax credit. The earned income tax credit. Capital gains rates. Retirement account contribution limits. Each of these things was added for a reason — sometimes a genuinely good reason — but each one also added a new layer of complexity that ordinary Americans have to navigate every spring.

The tax preparation industry, which barely existed as a consumer product in 1950, grew into a multi-billion-dollar business precisely because of this complexity. H&R Block opened its first office in 1955. By the 1980s, it had thousands of locations nationwide. TurboTax launched in 1984. The industry didn't create the complexity — but it certainly had no incentive to reduce it.

In fact, tax preparation companies have spent considerable money lobbying against simplification efforts. A 2019 investigation by ProPublica documented how Intuit (TurboTax's parent company) and H&R Block spent years lobbying Congress to block a government free-file system that would have allowed most Americans to have their taxes pre-filled and ready to approve — a system that already exists in dozens of other countries. The companies argued it would be a government overreach. Critics argued it would eliminate the need for their products.

The complexity, in other words, is partly a business model.

The Gig Economy Made Everything Harder

To be fair to the tax code, American financial life genuinely did get more complicated over the decades — and not just because of lobbying.

In 1955, most Americans had one employer, one source of income, and a pretty straightforward financial picture. Today, a significant portion of the workforce has side gigs, freelance income, investment accounts, rental properties, stock options, or some combination of all of the above. The rise of the gig economy alone — Uber drivers, Etsy sellers, freelance designers — created millions of Americans who suddenly became small business owners for tax purposes without necessarily knowing what that meant.

When your income comes from multiple sources, when you're both an employee and a contractor, when you have a 401(k) and a Roth IRA and a brokerage account and a small amount of crypto you bought in 2021 and regret — your taxes are genuinely harder to calculate than your grandfather's were. That part isn't manufactured complexity. That's real life.

But it doesn't explain everything. Other developed countries with comparably complex economies have found ways to make tax filing dramatically simpler for ordinary workers. Denmark, Sweden, and the UK all have systems where most citizens receive a pre-filled return that they simply verify and approve. The government already has most of the information — it just uses it.

America has never gone that route.

What It Costs Us

The average American spends about 13 hours preparing their federal tax return, according to IRS estimates. Multiply that by the roughly 150 million individual returns filed each year, and you're looking at nearly two billion hours of collective American time spent annually on tax compliance.

That's before you count the money. Americans spend somewhere around $11 billion per year on tax preparation services. For lower-income filers — the people who can least afford it — that cost is proportionally the most painful.

And underneath all of it is a quiet anxiety that didn't really exist in 1955. The fear of getting it wrong. The suspicion that you're missing something, that there's a deduction you should have claimed or a form you forgot to attach. The tax code has become complex enough that most people can't be fully confident they've done it correctly — which is a strange thing to feel about a civic obligation.

The Napkin Standard

There's a thought experiment sometimes called the "postcard tax return" — the idea that for most Americans with straightforward finances, your entire tax filing should fit on something the size of an index card. Income in, taxes owed, done.

Several tax reform proposals over the years have gestured toward this idea. None of them fully succeeded. The code got longer every decade, regardless of which party was in charge, regardless of what the reform promises said.

Somewhere in a filing cabinet, there's probably a 1040 from 1955 filled out in pencil by someone's grandfather. It took him forty-five minutes. He got a small refund. He spent it on something useful and never thought about it again.

That version of Tax Day is gone. Whether it had to be is a different question entirely.