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

From 1868 to 1913, about 90% of the national government’s income was derived from tax on alcohol and tobacco. While the Civil War was occurring the government instituted a brief income tax, but it wasn’t until 1913 that the sixteenth Amendment permitted Congress to tax incomes “from whatever sources attained.” The initial 1040’s were due on March 1, 1914. No money was taken from paychecks and none was sent in with the return. Every taxpayer’s computations were calculated by IRS field agents and a bill sent to the taxpayer on June 1st.

1766 – Leaders of the colonies met to extinguish British taxes in place by the Stamp Act. This Stamp Act Congress, which it was named, was the start of the American independence movement and the birthplace of the United States.

1782 – The first Congress under the Articles of Confederation formed. This Congress did not have any taxing powers.

1789 – Americans granted a newly formed Congress the ability to tax. Without taxing powers, the initial Congress of the United States barely survived seven years prior to being dubbed a failed attempt; the second Congress, with taxation powers, is still 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 into passing an excise tax on whiskey to increase earned income for the government and curb drinking. On the western frontier alcohol was the basic medium of exchange, and the 25% tax was a bit difficult to deal with. By 1794 the area was openly in rebellion. The forerunner of the Internal Revenue Service 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 that remained after the Revolutionary War and the War of 1812 is finally accounted for and paid. The South sees no reason to continue high import taxes that raise prices 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, causing 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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