Brief History Of U.S. Income Taxes
To defray the costs of the Civil War, Congress passed a temporary income tax in 1861, 3% on income > $800 ($20,000 in today’s dollars). The very next year, the tax was expanded and made progressive, with higher rates on higher incomes. The income tax did not become permanent until 1913, after the ratification of the 16th Amendment. At the beginning of WWI, Congress expanded the tax and raised rates to as high as 77%. Still, by 1918, only one in six families paid income taxes.
Revenue from income taxes rose to 9.4% of GDP in 1944, up from just 0.9% in 1940. Today, income taxes represent 8.3% of GDP; the percentage of all federal taxes is higher. The original Form 1040 was three pages, with an additional page for instructions. Today, the 1040 is deceptively just two pages, but its instruction booklet is 200 pages.
Miscellaneous Tax Facts
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