A Short Timeline of Tax Law of the United States, Part One
W. Marc Gilfillan, CPA, NC, individual and business CPA and Tax expert, shares about the history of taxes…
Between 1868 to 1913, about 90% of the national government’s revenue was derived from tax on whiskey and tobacco. While the Civil War was going on the government instituted a short income tax, but it wasn’t until 1913 when the sixteenth Amendment permitted 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 none was sent in with the return. Each taxpayer’s computations were calculated by IRS field agents and a bill mailed to the taxpayer on June 1st.
1766 – Colonial leaders met to protest British taxes in place by the Stamp Act. This Stamp Act Congress, as it was named, was the beginning of the American independence movement and the origin of the United States.
1782 – The first Congress under the Articles of Confederation met. This Congress had no taxing powers.
1789 – Americans gave a new Congress taxing powers. Without taxing powers, the initial Congress of the U.S. scantly survived 7 years prior to being dubbed a failed attempt; the 2nd Congress, granted taxation powers, is currently functioning after more than two hundred years. If you’re feeling the pressure with today’s taxes, call a CPA for Tax Preparation in Raleigh, NC for all your tax-related needs!
1792 – Alexander Hamilton coerces Congress into passing an excise tax on whiskey to increase earned income for the government and steady the increase in alcohol consumption. In the western frontier alcohol was the traditional mode of exchange, and the twenty-five percent tax was a bit difficult to deal with. By 1794 the area was in open revolt. The forerunner of the Internal Revenue Service was spawned to give the tax enforcement. Go here if you want help from a modern-day CPA firm in Raleigh, NC.
1832 – The national debt remaining from the Revolutionary War and the War of 1812 is paid off. The South doesn’t see any reason to continue high import taxes that raise prices for Southern consumers and promote industrial monopolies in the North.
1850 – John C. Calhoun of South Carolina warns Congress that the South might secede from the Union because heavy taxation in the South increased funds that ended up in the North, creating a great shift in money from the South to the North.
Stay tuned for Parts 2 and 3 of the Timeline of US Tax Policy!
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