THIS DAY IN HISTORY – Lincoln imposes first federal income tax – 1861

Via History.com

On this day in 1861, Lincoln imposes the first federal income tax by signing the Revenue Act. Strapped for cash with which to pursue the Civil War, Lincoln and Congress agreed to impose a 3 percent tax on annual incomes over $800.

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As early as March 1861, Lincoln had begun to take stock of the federal government’s ability to wage war against the South. He sent letters to cabinet members Edward Bates, Gideon Welles and Salmon Chase requesting their opinions as to whether or not the president had the constitutional authority to “collect [such] duties.” According to documents housed and interpreted by the Library of Congress, Lincoln was particularly concerned about maintaining federal authority over collecting revenue from ports along the southeastern seaboard, which he worried, might fall under the control of the Confederacy.

The Revenue Act’s language was broadly written to define income as gain “derived from any kind of property, or from any professional trade, employment, or vocation carried on in the United States or elsewhere or from any source whatever.” According to the U.S. Treasury Department, the comparable minimum taxable income in 2003, after adjustments for inflation, would have been approximately $16,000.

Congress repealed Lincoln’s tax law in 1871, but in 1909 passed the 16th Amendment, which set in place the federal income-tax system used today. Congress ratified the 16th Amendment in 1913.

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4 Comments
Anonymous
Anonymous
August 5, 2017 9:33 am

Wish we could finance today’s wars and other government programs with a 3% income tax.

They didn’t know how fortunate they were then.

Searcher After Truth
Searcher After Truth
August 5, 2017 3:03 pm

There is a break point in the history of the USA. It started in 1861 with the official start of the “Civil War”, as it is called.
To make a long story short, the Federal Government was taken over by people who understood the loophole in the Constitution that made Congress all powerful in the District of Columbia (DC).
From the “Civil War” on, little by little, the Federal government has tricked almost all of us into their jurisdiction. The Founders did not intend for us to be citizens of DC, but the 14th amendment changed that. As citizens of DC, a person is subject to everything Congress passes, including income tax. Prior to the Civil War, people were citizens of the state where they were domiciled, and only subject to the Federal government under the “Enumerated Powers” of the Constitution. Article 1 Section 8.
Here’s a link to an article about it.
noconstitutionforyou.blogspot.com

rhs jr
rhs jr
August 5, 2017 3:38 pm

TPTB take all the tax money people can bear, borrow all the system can loan, print until inflation is so bad only the Elite can buy new homes and cars; now some actor is urging Americans to take out 7 trillion in Reverse Mortgages and spend it. Pretty soon TPTB will offer to buy children for their harems, slaves and armies.

Brian
Brian
August 5, 2017 4:24 pm

“Congress repealed Lincoln’s tax law in 1871, but in 1909 passed the 16th Amendment, which set in place the federal income-tax system used today. Congress ratified the 16th Amendment in 1913.”

wrong, Wrong, WRONG!

The statute implementing the civil war income tax was repealed, this is true. However the precedence that backed it wasn’t. In fact it was solidified in case law in 1869 (Veazie Bank v. Fenno, 75 U.S. 533 (1869)) and reinforced in 1881 (Springer v. United States, 102 U.S. 586 (1881)). Then it lay mostly dormant until the creation of the federal reserve system which coincidentally corresponded to the same year the 16th amendment was ratified.

The income tax in Veazie Bank and the income tax enacted by the 16th amendment are two wholly different forms of income taxation.

The first is what taxes your wages.
The second (16th amendment) is what taxes your “rents”. (pay someone for the use of (something, typically property, land, or a car).)