Not too many accountants have become folk heroes in American life. But Henry W. Bloch, who died last week in Kansas City, Mo., at the age of 96, may be an exception. He was the last survivor of the three brothers who founded H&R Block, the mammoth tax-preparation business, in the mid-1950s. In a series of TV ads starting in the 1970s, Bloch’s earnest, reassuringly plain-but-competent persona not only made his company millions of dollars but eased the anxiety of millions of taxpaying Americans. “Don’t face the new tax laws alone,” he’d say.
Like more than a few entrepreneurs, Bloch essentially stumbled onto success. The middle son of a comfortable Jewish family in Kansas City, he had graduated from the University of Michigan before entering the Army Air Forces in World War II, winning the Air Medal and three oak leaf clusters as a B-17 navigator in Europe. After the war, he studied statistics at Harvard Business School and worked briefly as a stockbroker.
With a $5,000 loan from a wealthy relative, he and his brother Leon founded a financial services firm for merchants in their hometown — paying bills, keeping books, filing taxes — but business was slow and growth was discouraging. Leon departed to go to law school and Henry took on his younger brother Richard as partner. By the mid-1950s the Bloch brothers had settled into a moderately prosperous routine, bookkeeping for small businesses in Kansas City and, largely as a courtesy, preparing the occasional tax return for customers.
In January 1955, fate intervened. Since the Blochs made so little money calculating their customers’ tax returns, they decided to stop offering the service and prepared an advertisement to that effect in the Kansas City Star. But an ad salesman at the Star had a better idea: Since the IRS was in the process of discontinuing its practice of preparing returns for free, why not advertise tax preparation? When the brothers’ notice was published, their modest bookkeeping firm found itself suddenly inundated with customers.
So successful was their new business, in fact, that it quickly spread to more lucrative markets such as New York City, where the Blochs established a franchise operation that became H&R Block. (The name was deliberately misspelled to avoid mispronunciations of “Bloch.”)
By the early 1960s, when shares in H&R Block were first offered on the New York Stock Exchange, there were more than 200 offices around the country. By then, brother Leon had returned to the family firm and brother Richard subsequently branched out into medical philanthropy. Today, thanks in part to brother Henry’s ubiquitous appearances on television, there are about 12,000 H&R Block offices around the world, preparing some 23 million tax returns annually. Henry Bloch, whose impressive collection of impressionist art now goes to the Nelson-Atkins Museum in Kansas City, retired as chairman in 2000.
In one sense, the startling success of H&R Block was a reflection of the postwar growth of the economy and prosperity in American life. In the first century-and-a-quarter of the United States, there had been only one federal income-tax levy, to help finance the Civil War. A subsequent congressional attempt in the 1890s was struck down by the Supreme Court as unconstitutional. Even when the Sixteenth Amendment in 1913 permitted the imposition of an income tax and established the IRS, the great majority of Americans were essentially unaffected. Indeed, it’s astonishing in retrospect that, as late as 1955, the IRS was offering tax preparation, free of charge, as a service to taxpayers.
In another sense, the success of H&R Block represents an instructive failure of the federal tax code and a lesson for lawmakers. Politics will always govern the character and degree of federal taxation, but America’s tax laws are now so complex — and for many, incomprehensible — that the invention of something like H&R Block was inevitable, even necessary.
Philip Terzian, a former writer and editor at the Weekly Standard, is the author of Architects of Power: Roosevelt, Eisenhower, and the American Century.
