W. Marc Gilfillan, CPA, NC, individual and business CPA and Tax expert, shares about the history of taxes…
Between 1868 to 1913, about 90% of the national government’s revenue was derived from taxes on whiskey and tobacco. While the Civil War was going on the government instituted a short income tax, but it was not until 1913 that the 16th Amendment permitted Congress to tax incomes “from whatever sources derived.” The initial 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 taxes were calculated by IRS field agents and a bill sent to the taxpayer on the first of June.
1766 - Leaders of the colonies met to protest British taxes under the Stamp Act. This Stamp Act Congress, which it was named, marked the start of the American independence movement and the origin of the United States.
1782 - The first Congress under the Articles of Confederation formed. This Congress had no powers of taxation.
1789 - Americans gave a new Congress taxing powers. Without taxing powers, the initial Congress of the U.S. barely survived seven years prior to being declared a failure; the second Congress, with taxing powers, is still functioning 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 raise earned income for the government and steady the increase in alcohol consumption. In the western frontier alcohol was the traditional mode of exchange, and the 25% tax was harsh. By 1794 the area was in open rebellion. The father of the IRS was spawned 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 sees no reason for continued high import taxes that increase the price on goods for Southern consumers and increase the number of industrial monopolies in the North.
1850 - John C. Calhoun of South Carolina warns Congress that the South could leave the Union because heavy taxation in the South raised funds that were spent in the North, creating a great 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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