[1] The Income Tax Cocktail was created when income tax went into effect in 1913 (Gemini Photo).

[2] The elegant bar at the Hoffman Hotel in New York City, where the Income Tax Cocktail may have been created.

Since it is Tax Day, the most thematic choice is undoubtedly the Income Tax Cocktail. It’s a classic Pre-Prohibition drink that feels like a more sophisticated, slightly “taxing” twist on a Bronx Cocktail.

The addition of both sweet and dry vermouth—along with a healthy dose of bitters—perfectly captures that bittersweet feeling of finishing your returns—not to mention the bitter sting of the payment.

Below:

> The Income Tax Cocktail recipe.

> The history of income tax.

> The history of the Income Tax cocktail.

Elsewhere on The Nibble:

> The history of cocktails.

> The history of Happy Hour.

> The year’s 50+ cocktail and spirits holidays.
 
 
RECIPE: THE INCOME TAX COCKTAIL

Ingredients Per Drink

 
Preparation
 
1. SHAKE all ingredients with ice and strain into a chilled coupe glass.

2. GARNISH with an orange twist.

The inventor of the Income Tax Cocktail is, as with many classic cocktails, lost to time. The drink first appeared in the early 20th century, along with federal income tax (1913).

It may have been created at the Hoffman House hotel in New York City. Located on the then-fashionable Madison Square at Broadway between 24th and 25th Streets, the bar was known for inventing cocktails.

While there is no record anywhere of who invented the Income Tax Cocktail, Hoffman House is a good guess.

The Hoffman House bar was a known meeting place for political figures and financiers—the exact people who would have been most stung by the new income tax and in need of liquid comfoert.

A big promoter of the new cocktail was from Charlie Morrison, a legendary bartender at the Hoffman House.

The bar of the Hoffman House hotel enjoyed an international reputation as the city’s finest drinking establishment between 1864 and 1911. Here’s more about it.

[4] The Hoffman House Hotel in New York City closed on March 15, 1915, and was demolished shortly after to make way for a 16-story office and loft building. Here’s more about it (photo courtesy Museum Of The City Of New York).
 
 
THE HISTORY OF INCOME TAX

Before 1861, the U.S. government was funded primarily by customs duties on imported goods and excise taxes on products like liquor and tobacco.

To fund the enormous cost of the Civil War, President Abraham Lincoln signed the Revenue Act of 1861, America’s first federal income tax. It was a flat 3% tax on incomes over $800 (which would be roughly $16,000 to $21,000 today).

This first income tax was temporary and was repealed in 1872 once the war debt was manageable.

Some 30 years later, the government under Grover Cleveland tried to institute an income tax with the Wilson-Gorman Tariff Act of 1894. The attempt was immediately challenged and led to a Supreme Court ruling that it was unconstitutional because it wasn’t apportioned among the states based on their populations, as the Constitution required.

And then came…
 
 
The 16th Amendment

Realizing that they needed to formally amend the Constitution to bypass this ruling, Congress proposed the 16th Amendment. It was ratified on February 3, 1913, explicitly giving Congress the power to collect taxes on income “from whatever source derived,” regardless of a state’s population. This was the Revenue Act of 1913.

Congress lost no time in establishing the income tax system we recognize today, including a progressive tax structure where higher earners paid higher percentages.

The very first Form 1040 was released for the 1913 tax year. It was a single page, and a family with an income of $4,000 (a high income*) paid only about $10 in tax, around $335 in today’s money.
 
 
How Did We Get To Today’s Hefty Taxes?

Before 1943, taxpayers would calculate and pay their total annual tax bill directly to the IRS in one lump sum on March 1st†.

But the enormous cost of World War II required massive spending, and the government couldn’t wait until the filing day to get the cash.

The Current Tax Payment Act of 1943 introduced the withholding system we use today. Taxes were automatically deducted from every person’s paycheck, turning the annual income tax from a lump sum payment into a per-paycheck deduction that maximized government cash flow.
 
And there you have it!
 

[5] The U.S. Treasury Building in Washington, D.C. The Internal Revenue Service (IRS), a bureau within the U.S. Department of the Treasury, is the primary government body responsible for collecting federal income tax and enforcing tax laws. The statue is Albert Gallatin (1761–1849), a pivotal early American statesman who served as the longest-tenured Secretary of the Treasury (1801–1814) under Jefferson and Madison (photo CC-BY-SA-4.0 license).

________________
 
*An income of $4,000 in 1913 is equivalent in purchasing power to approximately $133,000 to $136,000 in 2026. This represents a cumulative inflation increase of over 3,200% over the 113-year period. A $4,000 salary in 1913 was considered quite wealthy, often aligning with high-end corporate management or top-tier professionals.

†The deadline has shifted over time, starting on March 1 in 1913, moving to March 15 in 1918, and finally settling on April 15 in 1955 to give taxpayers more time. If the 15th falls on a weekend or holiday, the deadline moves to the next business day.
 

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