In what year did the U.S. Congress impose the first personal income tax?

In order to help pay for its war effort in the American Civil War, Congress imposed the first personal income tax in 1861. It was part of the Revenue Act of 1861 (3% of all incomes over US $800 were taxed). This 1861 Act was rescinded in 1872.

Beginning in 1913, the 16th Amendment to the U.S. Constitution made the income tax a permanent fixture in the U.S. tax system. The amendment gave Congress legal authority to tax income. It resulted in a revenue law that taxed incomes of both individuals and corporations.

More Info: en.wikipedia.org

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21 Comments

Gerrie Szczesniak

Get rid of the IRS, impose a percentage tax, the less you make the less you pay and vice versa. No more loopholes for rich corporates.

Mary Brenner

Too bad constitutuon doesn't limit percentage of income allowed to be taxed! Congress seems to think it's for their own personal pleasures😡

Shane Oney

It's just wrong to tax people for being good , productive citizens. A better plan would be to tax people's consumption, like the Fair Tax.

mainjim

and it's been a blast ever since!

Carroll Price

The wording of the 16th Amendment imposes a "tax on income from whatever source derived", with taxable income being interest derived from invested capital. Contrary to how the 16th Amendment is wrongly interpreted by the IRS and the courts, compensation (wages) paid for labor does not legally constitute income since compensation for labor, is nothing more than an equal exchange - thus not taxable as income.

earlepg

Too bad the 3% rate went out the window. That $800 start point in 1861 would be nearly $28,000 today.

Leanna Greenbush

I picked 1909

patrhea

I picked 1909 and wrong.

Michael Doherty

Just stop the fraud, close the loopholes and reduce the number of exemptions and deductions. There is so much waste and inefficiency in the system that it cannot function properly.

Karen Mulhollem

Mary Brenner, and THAT hasn't changed much has it?

majohnson

Wrong, just look it up.

George Oliver Prince

Missed it, was thinking about the permanent tax

ninakamwene

Very lucky quess!

Fred Zeb Fudpucker

The origin of the income tax on individuals is generally cited as the passage of the 16th Amendment, passed by Congress on July 2, 1909, and ratified February 3, 1913; however, its history actually goes back even further. During the Civil War Congress passed the Revenue Act of 1861 which included a tax on personal incomes to help pay war expenses. The tax was repealed ten years later. However, in 1894 Congress enacted a flat rate Federal income tax, which was ruled unconstitutional the following year by the U.S. Supreme Court because it was a direct tax not apportioned according to the population of each state. The 16th amendment, ratified in 1913, removed this objection by allowing the Federal government to tax the income of individuals without regard to the population of each State.