During World War II, the U.S. government needed to raise cash — and fast. A team of experts that included an obscure young economist named Milton Friedman came up with income tax withholding. It was, as one senator put it, the best way to “get the greatest amount of money with the least amount of squawks.” Friedman, who would go on to become the high priest of the free market and small government, eventually appreciated the irony of that statement. He didn’t regret suggesting withholding as a wartime measure, but he spent the rest of his life lamenting its longevity...