[216] The War Revenue Act of 1917 and the Revenue Act of 1918 raised the top tax rate to 77 percent, greatly increased the number of Americans paying the income tax, and levied an excess profits tax on businesses and individuals.[217] Despite these tax acts, the United States was forced to borrow heavily to finance the war effort. Treasury Secretary McAdoo authorized the issuing of low-interest war bonds and, to attract investors, made interest on the bonds tax-free. The bonds proved so popular among investors that many borrowed money in order to buy more bonds. The purchase of bonds, along with other war-time pressures, resulted in rising inflation, though this inflation was partly matched by rising wages and profits.[214]
To shape public opinion, Wilson in 1917 established the first modern propaganda office, the Committee on Public Information (CPI), headed by George Creel.[218]
Wilson called on voters in the 1918 off-year elections to elect Democrats as an endorsement of his policies. However the Republicans won over alienated German-Americans and took control.[219] Wilson refused to coordinate or compromise with the new leaders of House and Senate—Senator Henry Cabot Lodge became his nemesis.