W. Marc Gilfillan, CPA, NC, individual and business CPA and Tax expert, shares about the history of taxes…
Between 1868 to 1913, about ninety percent of the federal government’s revenue was derived from tax on alcohol and tobacco. While the Civil War was going on the government instituted a short income tax, but it wasn’t until 1913 that the 16th Amendment permitted Congress to tax incomes “from whatever sources derived.” The first 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. Each taxpayer’s taxes were calculated by IRS field agents and a bill mailed to the taxpayer on June 1st.
1766 - Colony leaders got together to extinguish British taxes in place by the Stamp Act. The Stamp Act Congress, as it was called, was the beginning of the American independence movement and the origin 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 initial Congress of the U.S. scantly survived 7 years prior to being declared a failure; the second Congress, with 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 earned income for the government and steady the increase in alcohol consumption. On the western frontier whiskey was the basic medium of exchange, and the twenty-five percent tax was a bit difficult to deal with. By 1794 the region was in open rebellion. The forerunner of the Internal Revenue Service was created 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 does not see any reason to continue high import taxes that increase the price on goods for Southern consumers and promote industrial monopolies in the North.
1850 - John C. Calhoun of South Carolina warns Congress that the South might leave the Union due to the fact that heavy taxing of the South raised 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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