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

From 1868 to 1913, almost 90% of the federal government’s income was gotten from tax on whiskey and tobacco. While the Civil War was occurring there was a brief income tax, but it wasn’t until 1913 when the 16th Amendment was passed and enabled Congress to tax incomes “from whatever sources derived.” The first 1040’s were due on March 1, 1914. There was not any money taken from paychecks and no money was sent in with the return. Every taxpayer’s taxes were checked by IRS field agents and a bill mailed to the taxpayer on June 1st.

1766 - Leaders of the colonies got together to protest British taxes in place by the Stamp Act. This Stamp Act Congress, which it was named, was the beginning of the American independence movement and the beginning of the modern U.S.

1782 - The first Congress under the Articles of Confederation met. This Congress didn’t have any taxing powers.

1789 - America granted a newly formed Congress the ability to tax. Without taxing powers, the initial Congress of the U.S. barely lasted seven years before being dubbed a failed attempt; the second Congress, granted taxing powers, is still functioning after almost 300 years. If you are 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 to pass an excise tax on whiskey to raise revenue and steady the increase in alcohol consumption. In the western frontier whiskey was the basic medium of exchange, and the 25% tax was harsh. By 1794 the area was in open revolt. The father of the IRS was spawned to enforce the tax. 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 does not see any reason for continued high import taxes that increase prices for Southern consumers and promote industrial monopolies in the North.

1850 - John C. Calhoun of South Carolina tells Congress that the South could secede from the Union due to the fact that heavy taxation in the South increased funds that were spent in the North, creating a massive shift 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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