6 Interesting Income Tax Facts You Didn’t Know

6 Interesting Income Tax Facts You Didn’t Know

When we were founded in the 1700’s there were very few taxes at all!  Up until 1802, the USA was mainly supported by taxes on goods like tobacco, sugar, and spirits.  War is what initiated the need for funds and taxes.

  1. War of 1812: A sales tax was first introduced in 1812 to cover war costs.
  2. 1862, middle of the Civil War: Congress introduced a personal income tax for the first time. People earning between $600-$10,000/year paid a 3% tax and those over the threshold paid a higher percentage.
  3. 1862 IRS Commissioner’s Office established: This gave the Commissioner powers to assess, levy and seize assets for those who didn’t pay their taxes.
  4. 1913 Income Tax System became permanent: Thanks to the 16th  By 1918 annual collections reached over $1 billion.
  5. 1986 Ronald Reagan signed the Tax Reform Act: This bill severely reduced personal income taxes and raised corporate taxes.  The maximum rate was reduced from 50% to 28%.
  6. 2001 George W. Bush signed the Tax Relief Reconciliation Act: One of the biggest tax cuts in history, this act introduced a new low bracket of 10%, increased the child tax credit, adjusted brackets for married folks and reduced the top 4 tax brackets.

As we know, it was just changed again by President Trump.  No matter what happens going forward, taxes are here to stay!

Tags