Early in the United States history there weren’t any taxes as we know them today. These taxes didn’t come into play for a while. The main source of income for the U.S. government at this time was tariffs on goods coming into and out of the country. These were the basically the only way the government was gaining money in the form of taxes up until the Civil War. In 1861 the first tax on income was adopted by congress. This tax stated that anyone with an income above $800 had to pay 3% and anyone above $10,000 had to pay 5% of their income to the government. This tax was repealed the next year.During Taft’s presidency his party called for reducing the tariff rates. The Payne-Aldrich Tariff Act of 1909 went on to lower then general tariff rate 5%. However it also raised tariffs on items such as hides, iron, and coal. It lowered 650 items and raised 220.The Constitution stated at this time that a tax based on properties could only be set be individual states and this made it impossible for the government to assign one. During the Progressive Era they wanted income taxes to return. This made them upset because they wanted income taxes to be based on more then just people’s income. This led to the 16th amendment to the constitution. This allowed for properties to be included in the income taxes.In 1913 Woodrow Wilson passed the Underwood Tariff Act which proposed lowering the general tariff rate from 40% to 25%. It also reinstated the federal income tax to make up for the lost revenue. This was accepted almost immediately.Over the years people started to earn more money and the dollar was worth more so this put them into tax brackets that used to be for the wealthy people only. This forced them to revise the tax brackets to account for inflation. Today most people are being taxed based on their income. People that don’t earn enough to make it into the low end are actually given small sums. We now have progressive income taxes that make the more you make the more taxes that you have to pay in set increments. Today we also have social security, medicare, individual income, corporate income, federal income, transfer, and many other taxes.Today we also have the Federal Reserve System. After the Great Depression people were in favor of a centralized bank. It influences monetary and credit conditions in the economy, supervises and regulates banking institutions, maintains stability of the financial system, and provides financial services. This system has banks all over the country which supplies reliable currency all over. This system also has a Federal Reserve which contains millions in gold bars to back up the value of the dollar to prevent another great depression.http://en.wikipedia.org/wiki/Taxation_in_the_United_Stateshttp://www.u-s-history.com/pages/h883.htmlhttp://en.wikipedia.org/wiki/Revenue_Act_of_1913http://en.wikipedia.org/wiki/Income_taxhttp://en.wikipedia.org/wiki/Federal_Reserve_SystemU.S. currency
Comments