A Brief Timeline of Taxation of the United States, Section 1
W. Marc Gilfillan, CPA, NC, individual and business CPA and Tax expert, shares about the history of taxes…
From 1868 to 1913, almost ninety percent of the federal government’s revenue was derived from taxes on alcohol and tobacco. During the Civil War there was a brief income tax, but it wasn’t until 1913 when the sixteenth Amendment permitted Congress to tax incomes “from whatever sources derived.” The initial 1040’s were due on March 1, 1914. There was not any money taken from paychecks and no money was sent away with the return. Each taxpayer’s taxes were calculated by IRS field agents and a bill mailed to the taxpayer on June 1st.
1766 – Colony leaders met to protest British taxes under the Stamp Act. This Stamp Act Congress, which it was called, 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 formed. This Congress had no taxing powers.
1789 – America gave a new Congress taxing powers. Without taxing powers, the first Congress of the United States barely survived seven years before being declared a failed attempt; the second Congress, with taxation powers, is still 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 to pass an excise tax on whiskey to increase earned income for the government and curb alcohol consumption. On the western frontier alcohol was the traditional mode of exchange, and the 25% tax was a bit difficult to deal with. By 1794 the area was in open 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 remaining after the Revolutionary War and the War of 1812 is finally accounted for and paid. The South sees no reason to continue high import taxes that increase prices for Southern consumers and increase the number of industrial monopolies in the North.
1850 – John C. Calhoun of South Carolina warns Congress that the South could secede from the Union due to the fact that heavy taxation of the South increased funds that ended up in the North, creating a great shift 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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