A Short Timeline of Tax Law of the USA, Part 1
W. Marc Gilfillan, CPA, NC, individual and business CPA and Tax expert, shares about the history of taxes…
Between 1868 until 1913, almost 90% of the national government’s income was derived from taxes on whiskey and tobacco. During the Civil War there was a brief income tax, but it was not until 1913 that the 16th Amendment permitted Congress to tax incomes “from whatever sources attained.” The first 1040’s were due on March 1, 1914. There wasn’t any money withheld 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 June 1st.
1766 - Leaders of the colonies got together to extinguish British taxes under the Stamp Act. The Stamp Act Congress, which it was named, marked the beginning of the American independence movement and the beginning of the United States.
1782 - The first Congress under the Articles of Confederation met. This Congress didn’t have any ability to tax the people.
1789 - America gave a new Congress taxing powers. Without taxing powers, the first Congress of the U.S. barely lasted seven years before being declared a failure; the 2nd Congress, granted 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 drinking. In the western frontier alcohol was the traditional mode of exchange, and the twenty-five percent tax was a bit difficult to deal with. By 1794 the area was in open revolt. The forerunner of the Internal Revenue Service 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 that remained after the Revolutionary War and the War of 1812 is paid off. The South does not see any reason to continue high import taxes that increase 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 because heavy taxation of the South increased funds that were spent in the North, creating a massive 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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