Friday, October 30, 2009

Did You Know?

The first working income tax actually passed Congress during the Civil War. Although collection was problematic, in 1861 Congress did enact an income tax of 3 percent on earnings between $600 and $10,000 a year. Earnings over $10,000 a year (about $170,000 in today’s dollars) were subject to a tax of 5 percent. This first income tax was repealed by 1872.

A later version was enacted in 1894 without a constitutional amendment and was rejected by the Supreme Court as unconstitutional in 1895.

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