A Short Timeline of Taxation Practices of the United States, Part One
W. Marc Gilfillan, CPA, NC, individual and business CPA and Tax expert, shares about the history of taxes…
From 1868 until 1913, about ninety percent of the national government’s revenue was derived from taxes on whiskey and tobacco. During the Civil War there was a short income tax, but it was not until 1913 that the sixteenth Amendment permitted Congress to tax incomes “from whatever sources derived.” The first 1040’s were due on March 1, 1914. No money was withheld from paychecks and none was sent away with the return. Every taxpayer’s computations were checked by IRS field agents and a bill sent to the taxpayer on June 1st.
1766 - Colony leaders got together to extinguish British taxes in place by the Stamp Act. This Stamp Act Congress, as it was called, was the start of the American independence movement and the birth of the modern U.S.
1782 - The first Congress under the Articles of Confederation met. This Congress had no taxing powers.
1789 - America gave a new Congress taxing powers. Without taxing powers, the first Congress of the United States barely lasted seven years before being declared a failed attempt; the second Congress, with taxation powers, is currently functioning 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 coerces Congress into passing an excise tax on whiskey to raise revenue and steady the increase in drinking. In the western frontier alcohol was the basic 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 father 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 finally accounted for and paid. The South does not see any reason for continued high import taxes that raise 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 might leave the Union because the overly oppressive taxation of the South increased funds that ended up in the North, creating a massive change 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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