It's an intriguing document; here are several of my favorite paragraphs:
Though social policies sometimes governed the course of tax policy even in the early days of the Republic, the nature of these policies did not extend either to the collection of taxes so as to equalize incomes and wealth, or for the purpose of redistributing income or wealth.
To raise money for the War of 1812, Congress imposed additional excise taxes, raised certain customs duties, and raised money by issuing Treasury notes. In 1817 Congress repealed these taxes, and for the next 44 years the Federal Government collected no internal revenue. Instead, the Government received most of its revenue from high customs duties and through the sale of public land.
The need for Federal revenue declined sharply after the [civil] war and most taxes were repealed. By 1868, the main source of Government revenue derived from liquor and tobacco taxes. The income tax was abolished in 1872. From 1868 to 1913, almost 90 percent of all revenue was collected from the remaining excises.
One of the problems with the new income tax law was how to define "lawful" income. Congress addressed this problem by amending the law in 1916 by deleting the word "lawful" from the definition of income. As a result, all income became subject to tax, even if it was earned by illegal means. Several years later, the Supreme Court declared the Fifth Amendment could not be used by bootleggers and others who earned income through illegal activities to avoid paying taxes. Consequently, many who broke various laws associated with illegal activities and were able to escape justice for these crimes were incarcerated on tax evasion charges.
Prior to the enactment of the income tax, most citizens were able to pursue their private economic affairs without the direct knowledge of the government. Individuals earned their wages, businesses earned their profits, and wealth was accumulated and dispensed with little or no interaction with government entities. The income tax fundamentally changed this relationship, giving the government the right and the need to know about all manner of an individual or business' economic life. Congress recognized the inherent invasiveness of the income tax into the taxpayer's personal affairs and so in 1916 it provided citizens with some degree of protection by requiring that information from tax returns be kept confidential.
Seen in a broader picture, the 1986 tax act represented the penultimate installment of an extraordinary process of tax rate reductions. Over the 22 year period from 1964 to 1986 the top individual tax rate was reduced from 91 to 28 percent. However, because upper-income taxpayers increasingly chose to receive their income in taxable form, and because of the broadening of the tax base, the progressivity of the tax system actually rose during this period.
It is also possible to use this document to trace the ups and downs of the highest marginal income tax rates throughout the 20th Century:
1981: 50% (to be phased in by 1984)
1993: 39.6% (actually 36% but with a surcharge)
It is tempting, depending on your ideological bent, to draw a lot of unwarranted conclusions from these raw numbers.
Avoid that if you can: all of those numbers come with caveats about changes in deductions, reporting, capital gains, loopholes, corporate tax rates, and zillions of other details through which you have to examine the whole picture. For example, the 94% tax rate of 1945 looks far more confiscatory than it was in practice, because taxation at levels of 79%+ during the Depression had led the wealthy to shelter most of their money, and declare as little as possible as personal income.
It does suggest, however, where President Obama, Paul Krugman, and Tim Geitner (among others) actually see us going with the top marginal tax rates. Remember: for them the New Deal as an antidote to the Great Depression is the object lesson, and post-WW2 booms depended not on the destruction of the rest of the world's industrial base, but upon our tax policies.
So it's important to note that the top marginal tax rates during this period were 63-79-94-91-70%.
I suspect that once there is anybody working at Treasury besides Geitner that somebody will be assigned to rewrite this official government history of taxation.
So enjoy it now while you can: a period piece.