Federal Tax And Federal Income Tax

3069 Words13 Pages
To most, the term federal income tax is just paying the government or money they don’t get. But in government and the world of finance, it is major and involved idea which involves a great deal of focus and discussion. The United States’ federal income tax is a complex system which is a necessary function of the government. A taxable amount is determined on income, and it creates taxation for the government to accumulate money. There are many factors that play into the complexity of the system which developed the processes of the federal income tax today. Understanding this financial system requires a level of insight into the layers of information that the federal income tax entails. Taxation in America has always been a huge factor of societal and governmental focus. The nation started with a hatred for taxes dating back to the tax burden placed on the American colonies by Great Britain. Early in its history, America had few very few taxes. However, it became the major source of revenue for the United States government. The War of 1812 created a higher need for taxation, and initiated the nation 's first sales taxes which were placed on gold, silverware, jewelry, and watches. But in 1817 the internal taxes were repealed, and the government relied on tariffs on imported goods for funds. Once again, the onset of war generated a necessity of greater revenue, and in 1862, during the civil war, the nation’s first income tax was enacted. This income tax was the foundation to
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