Does it seem like personal income tax has been around forever? In fact, income taxation is a relatively recent event in US history and was even declared unconstitutional at one point. Here we present the historical highlights of the development of personal income tax in the United States. Keep in mind this is now one of your largest expenses.
1862
The US government imposes income taxes on citizens to pay for the Civil War. This period of taxation lasts until the law is repealed in 1872.
1894
A law taxing all personal income in excess of $4,000 at a rate of 2% is enacted but rejected by the US Supreme Court as unconstitutional.
1909
A new amendment allowing personal income taxation is proposed and ratified as the 16th Amendment by 36 states in 1913. Tax on personal income is now required by law.
1943
The government begins withholding taxes from paychecks, or “paying itself first”. This steady stream of income is required to wage World War II.
1952
The IRS reorganizes, finding that its former system of political appointment is ineffective.
1996
President Clinton creates a special commission to reorganize the IRS as it is, errr, ineffective.
2007
Only 56 days until you have to file a personal income tax return. Good luck.
