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"Income tax returns are the most imaginative fiction being written today."
Herman Wouk, U.S. dramatist and historical novelist, b. 1915On Feb. 3, 1913, the 16th Amendment to the Constitution was ratified making income tax a permanent part of the U.S. economy and our lives. As yet another tax season has us in its grip, a brief look at the events leading up to the fateful 16th Amendment might be of interest.
Under the Articles of Confederation, adopted in 1781, the government had few responsibilities and no nationwide tax system. The country depended primarily on donations from the states for revenue and the states imposed taxes as
When the Constitution was adopted in 1789, the federal government was granted the authority to collect taxes. To help pay the debts of the Revolutionary War, Congress levied excise taxes on such things as alcohol, refined sugar, tobacco and snuff, carriages, property sold at auction and various legal documents.
In the late 1790’s, the government imposed the first direct tax (a recurring tax paid directly by the taxpayer based on the value of the item taxed) on property and slave owners. When elected, Thomas Jefferson abolished direct taxes and the country relied again on revenue generated by various excise taxes.
To raise money to fund the War of 1812, Congress imposed additional excise taxes, raised customs duties and issued Treasury notes. In 1817, these taxes were again repealed and for 44 years the government collected no internal revenue, relying on customs duties and the sale of public lands to provide sufficient funds for running the government.
When the Civil War broke out, Congress passed the Revenue Act of 1861, which reinstated certain excise taxes and, for the first time, imposed a tax on personal income-3% on incomes higher than $800 a year. This tax on personal income was a new direction for the government’s tax system, relying mainly on excise taxes and customs duties. Due to increased war debt, the Union passed the Act of 1862 which imposed new excise taxes on items such as playing cards, gunpowder, feathers, telegrams, iron, leather, pianos, yachts, billiard tables, drugs, patent medicines and whiskey and also reformed and expanded the income tax system. After the war, the need for revenue declined and income taxes were eliminated in 1872 and, once again, the government relied primarily on taxes on tobacco and alcohol for revenue.
In 1894 Congress enacted a flat rate income tax which was found unconstitutional the next year because the Constitution allowed Congress to impose direct taxes only if they were levied in proportion to each state’s population. Becoming increasingly aware that high tariffs and excise taxes were not a sufficient source of revenue to run the government, Congress ratified the 16th Amendment in 1913, which allowed the government to tax the income of individuals without regard to the population of each state.
Tax rates have gone up and down and tax regulations have changed many times over the years due to the economic needs of the government. Even the date for filing has changed. April 15th has not always been the filing deadline. March 1st was the date chosen by Congress in 1913 after the passage of the 16th Amendment. In 1918, Congress moved the date forward to March 15th where it remained until 1954 when it was again moved forward to April 15th.
April 15th is fast approaching. The Wauwatosa Library has many of the state and federal tax forms and instructions in the Adult Library for your convenience and reproducible forms, instructions and publications are available at the Adult Information Desk. The AARP is providing tax assistance to senior citizens in the Wauwatosa Civic Center on Tuesdays until April 15th. Call the Adult Reference Desk to make an appointment.