Income Tax Dbq

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In the late 1800s, the U.S Treasury Department used sales tax and tariffs to fund its federal budget. A tax or tariffs are funds that are paid to the government that are added when something is bought that is considered valuable. Because of the Civil war, there was a financial burden on the country. In 1861, Congress reacted by implementing taxes on individuals. The first income tax started off by taxing individuals 3% making more than $800, while people who made more than that gave up a larger percentage. (1)This taxation period only lasted a couple of years and ended in 1872. In 1894, Congress re-authorized the income tax by taxing people 2% who earned more than $4000. (2)This caused a lot of controversy because some believed it was unconstitutional. …show more content…

The Conservatives knew that majority of the states would ratify the amendment; so they agreed with the proposal to grant legislatures from the states to vote on the new amendment. (5) On July 2, 1909, the 16th Amendment was authorized and passed by congress. By February 3, 1913, the amendment had gotten three-quarters of the states to approve it—the number required by the Constitution for ratification. “Certified by Secretary of State Philander C. Knox on February 25, 1913, it then became the 16th Amendment to the Constitution.”(6) The 16th Amendment stated that “Congress shall have the power to lay and collect taxes on incomes, from whatever sources derived, without apportionment among the several states and without regard to any census or enumeration.” (7) As a result of the 16th Amendment in 1913, because of exemptions and deductions, no more than 1 percent of the population paid income taxes. Tax rates started out at 1% and rose to 6% on income over $500,000. (8) With the 16th Amendment being passed through the necessary steps before becoming a constitution law, the federal government was allowed to enforce taxes on its citizens and people making money. This allowed the government to fund programs that included law enforcement, healthcare, and

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