W. Marc Gilfillan, CPA, NC, individual and business CPA and Tax expert, shares about the history of taxes…
Between 1868 until 1913, about ninety percent of the national government’s income was derived from taxes on alcohol and tobacco. While the Civil War was going on there was a brief income tax, but it was not until 1913 that the sixteenth 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 taken from paychecks and none 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 - Leaders of the colonies got together to protest British taxes under the Stamp Act. The Stamp Act Congress, as it was called, was the beginning of the American independence movement and the birthplace of the United States.
1782 - The first Congress under the Articles of Confederation met. This Congress had no taxing powers.
1789 - Americans granted a newly formed Congress the ability to tax. Without taxing powers, the first Congress of the U.S. barely lasted seven years prior to being dubbed a failed attempt; the 2nd Congress, granted taxing 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 persuades Congress to pass an excise tax on whiskey to raise revenue and steady the increase in drinking. In the western frontier whiskey was the basic 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 enforce the tax. 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 paid off. The South sees no reason to continue high import taxes that increase the price on goods 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 in the South increased funds that ended up in the North, causing 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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