A Brief Timeline of Taxation of the USA, Section One
Between 1868 to 1913, almost 90% of the national government’s income was gotten from tax on whiskey and tobacco. During the Civil War the government instituted a short income tax, but it was not until 1913 that the 16th Amendment was passed and enabled Congress to tax incomes “from whatever sources attained.” The first 1040’s were due on March 1, 1914. No money was withheld from paychecks and no money was sent in with the return. Each taxpayer’s taxes were calculated by IRS field agents and a bill mailed to the taxpayer on the first of June.
1766 – Colony leaders got together to extinguish British taxes under the Stamp Act. The Stamp Act Congress, as it was named, marked the beginning of the American independence movement and the origin of the modern U.S.
1782 – The first Congress under the Articles of Confederation formed. This Congress didn’t have any taxing powers.
1789 – Americans gave a new Congress taxing powers. Without taxing powers, the initial Congress of the United States scantly lasted seven years prior to being declared a failed attempt; the 2nd Congress, with taxation powers, is currently functioning after more than two hundred years.
1792 – Alexander Hamilton persuades Congress into passing an excise tax on whiskey to raise revenue and steady the increase in drinking. In the western frontier alcohol was the traditional mode of exchange, and the twenty-five percent tax was harsh. By 1794 the region was openly in revolt. The father of the IRS was created to enforce the tax.
1832 – The national debt remaining after the Revolutionary War and the War of 1812 is paid off. The South does not see any reason for continued high import taxes that raise prices for Southern consumers and promote industrial monopolies in the North.
1850 – John C. Calhoun of South Carolina tells Congress that the South might leave the Union because heavy taxation of the South increased funds that ended up in the North, creating a great change in wealth from the South to the North.
Stay tuned for Parts 2 and 3 of the Timeline of US Tax Policy!
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