A Short Timeline of Tax Law of the US, Chapter 1
W. Marc Gilfillan, CPA, NC, individual and business CPA and Tax expert, shares about the history of taxes…
From 1868 until 1913, almost ninety percent of the national government’s revenue was derived from tax on alcohol and tobacco. During the Civil War there was a short income tax, but it was not until 1913 when 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 none was sent away with the return. Each taxpayer’s computations were calculated by IRS field agents and a bill sent to the taxpayer on June 1st.
1766 – Colony leaders got together to extinguish British taxes under the Stamp Act. This Stamp Act Congress, as it was called, marked the start 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 did not have any taxing powers.
1789 – America granted a newly formed Congress the ability to tax. Without taxing powers, the initial Congress of the U.S. barely lasted 7 years prior to being dubbed a failed attempt; the 2nd Congress, with taxing powers, is currently functioning after almost 300 years. If you are 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 persuades Congress into passing an excise tax on whiskey to increase revenue and steady the increase in alcohol consumption. On the western frontier alcohol was the traditional medium of exchange, and the 25% tax was harsh. By 1794 the area was in open rebellion. 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 finally accounted for and paid. The South does not 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 could leave the Union due to the fact that the overly oppressive taxation in the South increased funds that ended up in the North, creating a massive 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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