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Farmers Start to Form Political Organizations
After the Civil War, the growing industrial and financial markets of the eastern United States generally prospered. But the farmers of the south and west suffered from low prices for their farm products, while they were forced to pay high prices for manufactured goods. Throughout the 1860s, 1870s, and 1880s, farmers formed political organizations. -
Financial Requirements of Civil War Prompt the First American Income Tax
At first, Congress placed a flat 3-percent tax on all incomes over $800 and later modified this principle to include a graduated tax. -
Congress Repeals the Income Tax
Although the income tax is repealed, the concept does not disappear. -
Congress Enacts a 2% Tax on Income Over 4,000$
The tax was almost immediately struck down by a five-to-four decision of the Supreme Court, even though the Court had upheld the constitutionality of the Civil War tax as recently as 1881. Although farm organizations denounced the Court’s decision as a prime example of the alliance of government and business against the farmer, a general return of prosperity around the turn of the century softened the demand for reform. -
Sixty First Congress of the United States of America
Begun and held at the city of Washington. Proposed the 16th Amendment. -
Congress Passes the 16th Amendment
Conservatives, hoping to kill the idea for good, proposed a constitutional amendment enacting such a tax; they believed an amendment would never receive ratification by three-fourths of the states. -
16th Amendment Takes Effect
The amendment was ratified by one state legislature after another, and on February 25, 1913, with the certification by Secretary of State Philander C. Knox, the 16th amendment took effect.