A Short Timeline of Taxation Practices of the US, 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 income was derived from taxes on alcohol and tobacco. While the Civil War was occurring there was a short income tax, but it wasn’t until 1913 that the 16th Amendment was passed and enabled Congress to tax incomes “from whatever sources attained.” The initial 1040’s were due on March 1, 1914. There wasn’t any money taken from paychecks and no money was sent in with the return. Every taxpayer’s computations were calculated by IRS field agents and a bill mailed to the taxpayer on the first of June.
1766 – Colony leaders got together to protest British taxes in place by the Stamp Act. The Stamp Act Congress, which it was named, marked the beginning of the American independence movement and the birth of the modern U.S.
1782 – The first Congress under the Articles of Confederation met. This Congress had no ability to tax the people.
1789 – Americans granted a newly formed Congress the ability to tax. Without taxing powers, the initial Congress of the U.S. barely lasted seven years before being declared a failed attempt; the 2nd Congress, granted taxation powers, is still going strong 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 to pass an excise tax on whiskey to increase earned income for the government and curb drinking. On 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 openly in revolt. The father of the IRS 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 that remained after the Revolutionary War and the War of 1812 is paid off. The South sees no reason to continue high import taxes that raise prices for Southern consumers and increase the number of industrial monopolies in the North.
1850 – John C. Calhoun of South Carolina tells Congress that the South could leave the Union because heavy taxation of the South increased funds that ended up in the North, causing 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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