Whiskey Excise Tax Jefferson
The income tax in the United States: a brief history
After the United States declared its independence and fought the War of Independence U.S. Congress was based on the excise duties on alcohol, snuff and some other products for revenue to pay its war debts. These taxes were not popular and led to the Whiskey Rebellion during the administration of George Washington. U.S. instituted direct taxes on real estate, property, and slaves and taxes that Thomas Jefferson abolished in 1802. U.S. relied solely on excise taxes for a few more years until they were repealed in 1817. Then U.S. had a lot of public land to sell and was based on land sales and customs duties for admission to the Civil War.
The cost of the Civil War prompted Congress to restore the excise duty and impose a personal income tax. The tax rate at that time was 3% and insufficient to the needs of the war, so Congress passed new excise duties on a wide range of items and began to tax licenses, professions and trades. After the Civil War the need for revenues fell and the Congress abolished the income tax in 1872. For the next 30 years nearly all income was derived from various excise duties.
Congress passed an income tax rate of 2% in 1894, but the Supreme Court ruled that the new tax was a direct tax that was not allocated according to population of each state, as provided by Article 1 of the Constitution. War U.S. Spanish-American forced to increase tariffs and excise duties, but was discussed with the U.S. force could no longer sustain high and excise duties and taxes were a disproportionate burden on the poorest.
The ensuing debates about the excise duties, property taxes, income taxes and took the 16th Amendment to the Constitution in 1909 that allowed the federal government to levy a tax on individual legal income. The amendment clarifies the previous decision of the Supreme Court in essence, saying the income tax was not a direct tax that could be applied without into account the population of each state. Ironically, the amendment was proposed by conservatives in Congress who believe that the amendment would be ratified and they expected the amendment would defeat the idea of an income tax forever. However, in 1913, the amendment was ratified by 36 of the 48 states, the necessary majority of three quarters, and then ratified by six other states.
The new income tax law passed by Congress established the tax rates from 1% to 7% and included exemptions and deductions generous. As a result, only 1% of the population pays income tax during the first year following the adoption of the tax law.
When U.S. entered the First World War the need for income has increased considerably. In the coming years the income tax was increased several times starting with the Revenue Act of 1916. War Revenue Act of 1917 lowered exemptions and tax rate rises again. The 1918 act raised the tax rate lower tax 6% and the maximum rate to 77%.
Since the end of World War I the tax rate has changed many times, reflecting the needs of the Federal Government the time for change. For example, during the prosperity of the 1920s, the tax rate was reduced to a minimum rate of 1% and a maximum rate of 25%. As the economy United States has grown in strength and the federal government has grown in size, the income tax has become an increasingly important segment of the income of government. As a result, tax legislation and the tax code has been revised and improved constantly in an effort to meet the changing needs of the income the federal government.
About the Author
Garry Gamber is a public school teacher and entrepreneur. He writes articles about politics, real estate, home businesses, health, poetry, and books. He is the National Director of Good Politics Radio and owns an online BookWise bookstore.
Will America Revolt? (Part 1)