Posts Tagged ‘Revenue Act of 1861’

I had to run to the doctor’s office tonight.  The back of my leg (just above the calf muscle) has been giving me fits for a couple days and, since I couldn’t diagnose it, I figured I’d get a second (well, actually a first) opinion.  It turned into a big nothing…a bit of tendonitis.  I’ve been walking more and riding my bike more, so a bit of fatigue behind the knee should be expected.  Of course, this has nothing to do with history except to lay down a proper excuse as to why I’m keeping Today’s History Lesson brief.

We talked about the Revenue-Marine yesterday and its use to assist in the proper collection of tariffs.  Let’s continue in that vein today.

In August of 1861, the American Civil War was just a couple of months old, and again, the government was feeling cash-strapped.  President Lincoln, in the Oval Office since March, had a Commander-in-Chief’s-eye view of the final collapse of the Union and beginning of hostilities between U.S. forces and those from the C.S. (Confederate States).

When he first took the Oath, he was already thinking about the costs of returning the “wayward” South to the Union.  Some of his earliest discussions with his Cabinet involved the concept of an income tax should war break out.  Today, income tax is a part of our existance, but in Civil War times, it was a new burden to lay on the citizens.  But unlike today (if I may editorialize a bit), at least Congress and the President did some things right when it passed, on August 5, 1861, the first income tax legislation in the form of the Revenue Act of 1861:

  • It was small.  The tax rate was 3%.
  • It was flat.  The 3% rate was assessed across the board.
  • It had provisions for the poorest of citizens.  The tax was only levied on those making more than $800 a year.

The Revenue Act was in force for a year, when it was replaced by the Revenue Act of 1862.  The new Act introduced the graduated rates we know so well today (3% on incomes greater than $600/yr, 5% on those greater than $10,000/yr).  It also added a termination provision…the Act would cease in 1866.

If only our tax laws were remotely similar to those from Lincoln’s day…

Recommended Reading: Lincoln

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