A Short Timeline of Taxation Practices of the US, Section 1
Posted by Knowledge Guy in Business and Commerce, tags: 16th Amendment, Accountant, Alexander Hamilton, American Independence, Articles Of Confederation, Bookkeeping, Colonial Leaders, Cpa, Excise Tax, Failed Attempt, Forerunner, Gilfillan, Income Tax, Independence Movement, Internal Revenue Service, marc gilfillan, National Debt, NC, Open Revolt, Paychecks, raleigh, Raleigh Nc, Revolutionary War, Stamp Act Congress, tax, Tax Expert, Tax Preparation, Tax Return, Taxes, Traditional Mode, Western FrontierW. Marc Gilfillan, CPA, NC, individual and business CPA and Tax expert, shares about the history of taxes…
From 1868 until 1913, about 90% of the federal government’s income 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 when the 16th Amendment permitted Congress to tax incomes “from whatever sources derived.” The initial 1040’s were due on March 1, 1914. There wasn’t any money withheld from paychecks and none was sent in with the return. Each taxpayer’s taxes were calculated by IRS field agents and a bill sent to the taxpayer on June 1st.
1766 – Colonial leaders got together to protest British taxes under the Stamp Act. This Stamp Act Congress, which it was called, marked the start of the American independence movement and the origin of the United States.
1782 – The first Congress under the Articles of Confederation met. This Congress did not have any taxing powers.
1789 – America granted a newly formed Congress the ability to tax. Without taxing powers, the initial Congress of the U.S. scantly survived seven years before being dubbed a failed attempt; the 2nd Congress, with taxing powers, is currently going strong 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 persuades Congress to pass an excise tax on whiskey to raise earned income for the government and steady the increase in drinking. On the western frontier alcohol was the traditional mode of exchange, and the 25% tax was a bit difficult to deal with. By 1794 the area was in open 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 that remained from the Revolutionary War and the War of 1812 is finally accounted for and paid. The South sees no reason for continued high import taxes that increase the price on goods for Southern consumers and promote industrial monopolies in the North.
1850 – John C. Calhoun of South Carolina warns Congress that the South could leave the Union due to the fact that heavy taxing of the South raised funds that ended up in the North, creating a massive 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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