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Revenue Act of 1861
During the Civil War the government needed more money so it imposed an income tax to raise revenue. The tax was 3% on people who made over $800 per year. -
Reforms to Revenue Act
These reforms allowed a 5% income tax on people who made over $10,000 per year. -
Income Tax is abolished
The Civil War ended and the need for revenue decreased so the income tax was a ended. Most the revenue then came from taxes on alcohol and tobacco. -
Flat Income Tax Enacted
Congress enacts a flat income tax, which was the same percent of income tax on every citizen. -
U.S. Supreme Court Intervenes
The Supreme Court finds the income tax unconstitutional because it was a direct tax that didn't take into account the population of each state. -
President Proposes Income Tax
President William Howard Taft asked Congress to propose an amendment that would allow the national government to enact an income tax. -
Congress passes amendment onto states.
The Sixty-First Congress pass the adment onto the state legislatures for approval. There was a strong opposition in the Northeastern states and approval in the South. -
Ratified
Finally 36 states had ratified the amendment. Congress proceded by initiating an income tax ranging from 1%-7% depending on how much money you make. -
Amending The Amendment
Congress took the word "lawful" out of the amendment. This meant that all income a person received was subject to income tax. An example would be if you were selling illegal substances and you didn't tell the government your profits you would be breaking the law again. -
Revenue Act of 1917
Income taxes increased dramatically for those making over $2,000,000.
