Income Taxes Pre-Pollock
To raise revenue to fund the Civil War, Congress introduced the income tax through the Revenue Act of 1861. It levied a flat tax of 3% on annual income above $800, which was equivalent to $20,693 in today's money. This act was replaced the following year with the Revenue Act of 1862, which levied a graduated tax of 3–5% on income above $600 (worth $13,968 today) and specified a termination of income taxation in 1866.
The Socialist Labor Party advocated a graduated income tax in 1887. The Populist Party "demand a graduated income tax" in its 1892 platform. The Democratic Party, led by William Jennings Bryan, advocated the income tax law passed in 1894, and proposed an income tax in its 1908 platform.
Prior to the Supreme Court's decision in Pollock v. Farmers' Loan & Trust Co., all income taxes had been considered indirect taxes imposed without respect to geography, unlike direct taxes, that must be apportioned among the states according to population.
The Wilson–Gorman Tariff Act of 1894 attempted to impose a federal tax of 2% on incomes over $4,000 (worth $107,446 today). Derided as "un-Democratic, inquisitorial, and wrong in principle," it was challenged in federal court.
Read more about this topic: Sixteenth Amendment To The United States Constitution
Famous quotes containing the words income and/or taxes:
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