Impose An Income Tax On Americans Occurred During The War Of 1812

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The first proposal to impose an income tax on Americans occurred during the War of 1812. After two years of war, the federal government had accumulated a whopping $100 million of debt. To fund the war against Britain, the government doubled the rates of its major source of revenue, customs duties on imports, which obstructed trade and ended up yielding less revenue than the previous lower rates. At the height of the war, excise taxes were imposed on goods and commodities, housing, slaves and land were taxed. Finally when the war ended in 1816, these taxes were abolished. A high tariff was then passed to retire the accumulated war debt. Thankfully, the notion of an income tax was conquered (Young, 2004). However, the thought of the income tax reappeared as an idea to fund the Union armies in the war to prevent the secession of the Confederacy. The war was expensive, costing on average $1,750,000 a day. Struggling to meet these expenses, the Republican Congress borrowed heavily, doubled tariff rates, sold off public lands, imposed a maze of licensing fees, increased old excise tax rates and created new excise taxes. But none of this was enough to fund the debt (Young, 2004)..
In July 1861, the Congress passed a 3% tax on all personal net income above $600 a year that is equitant to about $10,000 today. However, no revenue was ever raised because a second tax passed before the first was due on June 30, 1862. The war 's demand on resources made the earlier tax ineffective, and

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