A Short Timeline of Taxation Practices of the USA, Section 1
Posted by Tax Man - 20/12/09 at 12:12 amW. Marc Gilfillan, CPA, NC, individual and business CPA and Tax expert, shares about the history of taxes…
From 1868 until 1913, almost 90% 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 when the 16th Amendment permitted Congress to tax incomes “from whatever sources derived.” The initial 1040’s were due on March 1, 1914. There wasn’t any money taken from paychecks and none was sent in with the return. Each taxpayer’s computations were checked by IRS field agents and a bill sent to the taxpayer on the first of June.
1766 - Colonial leaders got together to extinguish British taxes under the Stamp Act. This Stamp Act Congress, as it was called, was 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 powers of taxation.
1789 - America granted a newly formed Congress the ability to tax. Without taxing powers, the initial Congress of the U.S. scantly lasted seven years before being declared a failed attempt; the 2nd Congress, granted taxation powers, is currently going strong after almost 300 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 into passing an excise tax on whiskey to increase revenue and curb drinking. In the western frontier whiskey was the traditional mode of exchange, and the twenty-five percent tax was harsh. By 1794 the region was in open rebellion. The forerunner of the Internal Revenue Service was created 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 for continued high import taxes that increase prices for Southern consumers and promote industrial monopolies in the North.
1850 - John C. Calhoun of South Carolina tells Congress that the South might leave the Union due to the fact that heavy taxation of the South raised funds that ended up in the North, creating a great change 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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