War & Income Tax

Federal income tax

Since it’s tax season, I decided to do a little reading online about the history of income taxes in the United States. What I found was this: Our taxes are heavily affected by wars that our country is involved in. As I studied,  I made this outline of our income tax history:

1791 – 1802  No income tax at all, although there were “internal taxes” on items such as alcohol, refined sugar, and tobacco.

1812  The War Of 1812 broke out, and taxes were created on gold, silverware, jewelry, and watches to pay for war expenses.

1817 Congress cancelled all internal taxes since the war was over, although there were tariff taxes on imported items. We were able to pay for our government with just tariffs!

1862 Civil War beganand Congress ordered the first income tax, to pay for the war. They also created the office of Commissioner Of Internal Revenue. Sales tax, excise tax, and inheritance taxes were also created. Those who earned $600-$10,000 a year were charged 3% income tax.

1866 The internal revenue service collected more than $310 million dollars in taxes, although the Civil War had wrapped up in April of 1965.

1868 Taxes on tobacco and liquor were started back up.

1872  Congress eliminated personal income tax.

1894  Congress passed a 2% income tax.

1895  The United State Supreme Court ruled that income tax was a violation of the Constitution, and cancelled the income tax.

1913  The 16th amendment to the original Constitution was passed, making it legal for the government to charge individuals and companies income tax. The tax rate was 1% for the poorest, and 7% for anyone making over $500,000 a year.

1914  World War I began. Although the U.S. did not join in the war until 1917, the government started collecting war funds.

1916  Congress passed the Revenue Act, and the top tax bracket was raised from 7% to 15%.

1917 The U.S. jumped into World War I. The War Revenue act was passed, and the top tax bracket was raised to 67%.

1918  The top tax bracket was raised to 77%. Over $1 billion dollars in taxes were collected.

1920 The war was over, but the government had gotten used to the tax money rolling in, and collected $5.4 billion dollars.

1925  The government finally got around to lowering the taxes, seven years after World War I had ended, lowering the top bracket to 25%. This rate continued through 1931.

1932  We were experiencing the Great Depression, and the government needed money for its relief programs. Congress raised the top tax bracket from 25% to 63%.

1939  World War II began. The United States was not involved yet, but started building up its war funds, using the still-high tax rates.

1941  The U.S. entered World War II, using the high taxes its citizens were paying.

1943  The government ordered that income tax be deducted from paychecks, instead of being due at the end of the year. They could not wait to get their money.

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The White Zone – by Carolyn Marsden (2012)

The White Zone

This novel of young cousins living in Baghdad in 2003 reads like the nightly world news. First one part of the city is bombed, then another. Bullets come through apartment windows. The Muslim residents of the city are at war with each other. Sunni Muslims hate Shiite Muslims. Shiite Muslims hate Sunni Muslims. Families move from place to place.

Nouri and Talib are 10-year-old cousins who have grown up very close. But Talib has the misfortune of having one Sunni parent and one Shiite.

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