A Brief Timeline of Tax Practices of the USA, Part One

Posted by: Neil Robins on Friday, February 5th, 2010

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

Between 1868 until 1913, about ninety percent of the national government’s income was gotten from taxes on alcohol and tobacco. During the Civil War there was a brief 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. There was not any money taken from paychecks and no money 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 – Colony leaders got together to protest British taxes under the Stamp Act. The Stamp Act Congress, which it was called, marked the start of the American independence movement and the origin of the modern U.S.

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

1789 – Americans granted a newly formed Congress the ability to tax. Without taxing powers, the initial Congress of the United States barely survived 7 years before being dubbed a failed attempt; the second Congress, granted 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 into passing an excise tax on whiskey to raise revenue and curb alcohol consumption. In the western frontier alcohol was the traditional mode of exchange, and the 25% tax was a bit difficult to deal with. By 1794 the region was openly in revolt. 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 from the Revolutionary War and the War of 1812 is paid off. The South doesn’t see any 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 could secede from the Union due to the fact that heavy taxing of the South increased 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!

http://www.marccpa.com/