Income Tax….Bah, phooey!!

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I know that income tax is not the most pleasant subject of the day…..what is?

After all, how did income tax begin anyway???

The First Income Tax

The first Federal income tax was levied to help pay for the Union war effort. In the summer of 1861, Salmon P. Chase reported to the Congress that he would need $320 million over the next fiscal year to finance the war. He thought he could put his hands on $300 million by borrowing part of it and raising the rest through existing taxes and sale of public lands. He left it up to Congress to come up with a way to raise the remaining $20 million.

After weighing their options, the House Ways and Means Committee drew up a bill to tax personal and corporate incomes. This bill, the first income tax measure in the United States, called for a 3% tax on incomes over $800. Although the bill quickly passed in both the House and the Senate, it was never put into operation. Still, it paved the way for the next bill of its kind.

In 1862, Abraham Lincoln signed a bill that imposed a 3% tax on incomes between $600 and $10,000 and a 5% tax on higher incomes. The bill was amended in 1864 to levy a tax of 5% on incomes between $600 and $5,000, a 7.5% tax on incomes in the $5,000-$10,000 range and a 10% tax on everything higher. This bill was repealed in 1872 and declared to be unconstitutional.

The Confederacy also collected income taxes. It authorized its first national income tax measure in 1863. The Confederate bill that finally passed after great debate was a graduated income tax. It exempted wages up to $1,000, levied a 1% tax on the first $1,500 over the exemption, and 2% on all additional income

And, yes, here’s the quote you have looked for….

One final quote, most often mis-quoted (except right now, duh!). Benjamin Franklin, on November 13, 1789, wrote the following to Jean-Baptiste Leroy: “Our new Constitution is now established, and has an appearance that promises permanency; but in this world nothing can be said to be certain, except death and taxes.”




  • Cynthia
    May 20, 2015

    I love this article, it is very informative with a hint of humor, thanks for sharing!

    • Gerald
      May 21, 2015

      Cynthia thanks! It nice to know that sometimes a reader will enjoy my efforts. Thanks again!

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