A Brief Timeline of Taxation of the US, Chapter One

Raleigh NC Accountant

W. Marc Gilfillan, CPA, NC, individual and business CPA and Tax expert, shares about the history of taxes…

Between 1868 until 1913, about 90% of the federal government’s income was derived from taxes on alcohol and tobacco. During the Civil War the government instituted a brief income tax, but it was not until 1913 when 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. There was not any money withheld from paychecks and no money was sent in with the return. Each taxpayer’s taxes were checked by IRS field agents and a bill mailed to the taxpayer on the first of June.

1766 – Colonial leaders met to extinguish British taxes in place by the Stamp Act. This Stamp Act Congress, which it was named, was the start of the American independence movement and the birth of the United States.

1782 – The first Congress under the Articles of Confederation formed. This Congress had no ability to tax the people.

1789 – America gave a new Congress taxing powers. Without taxing powers, the initial Congress of the United States barely survived seven years before being declared a failed attempt; the 2nd Congress, granted taxing powers, is currently going strong after more than two hundred 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 raise revenue and steady the increase in drinking. In the western frontier alcohol was the basic medium of exchange, and the 25% tax was a bit difficult to deal with. By 1794 the area was in open rebellion. The father of the IRS 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 that remained from the Revolutionary War and the War of 1812 is paid off. The South does not see any reason to continue 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 could secede from the Union because the overly oppressive taxing of the South raised funds that ended up in the North, causing 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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