Fire & Finance Blog

Fire & Finance Blog

Income Tax

There Wasn’t Always an Income Tax

There was a time when it seemed downright un-American to tax someone’s income. However, the pressing need to pay for a costly civil war changed that view.

According to the U.S. Census Bureau, the income taxes first came to America 155 years ago, when President Abraham Lincoln signed a bill levying a 3 percent tax on incomes between $600 and $10,000, and 5 percent for greater incomes.

The tax was rescinded in 1872. After all, it was only going to be around long enough to pay off the war debt.

But then, like a bad penny, the income tax came back.

The income tax all of us know today dates to 1913, when the 16th Amendment to the Constitution was ratified.

Nowadays, about 149 million individual income tax returns are submitted annually, reporting tax revenues totaling nearly $1.7 trillion. Even that’s not enough, apparently.

 

Income Tax

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