Loan Drives and Taxation

Despite the success of the Liberty Loan program, as war expenditures rapidly increased and debt ballooned, government officials realized borrowing alone could not fully fund the war—taxation too must play a role. The War Revenue Act of 1918 forever changed American taxation. Before the First World War, three fourths of federal revenues were derived from custom and excise taxes; after the war, this would be flipped, so that the same percentage would now come from income, profit, and estate taxes. Still, bond drives remained crucially important. Bond subscribers were given a button with every purchase, and, according the poster to the left of the case, were expected to wear it as a sign of patriotism.