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History Of Income Taxes During 19th Century

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Barbara Kellar
BA333

The History of Income Taxes

Taxes during the 19th Century
In 1861, Lincoln levied the first federal income tax by signing the Revenue Act. Needing cash with which to fund the Civil War, Abraham Lincoln and the Congress agreed to impose a 3 percent tax on annual incomes over $800.00. The wording of the Revenue Act was broadly written to define income as a monetary gain derived from any kind of property, or from any specialized trade, employment, or vocation carried on in the United States or elsewhere or from any source whatever. (A&E Television Networks, 2014)
After the Civil War, the growing industrial and financial markets of the eastern United States thrived. From the 1860s, to the 1880s, farmers formed political organizations such as the Grange, the Greenback Party, or the National Farmers’ Alliance, and the People’s Party. All of these groups advocated many reforms considered radical for the times, including a graduated income tax. (our documents, n.d.). These groups would try to advocate for many reforms to take place and they were considered very radical for the times. One of the reforms that they advocated for was the graduated income tax.
“The weight must be distributed equally — not upon each man an equal amount, but a tax proportionate to his ability to pay.” — Representative Justin Morrill (Republican — Vermont) (Shepard, 2010). Graduated income tax is a system of taxation in which people are assessed at a greater percentage of their
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