05 February 2008

Interesting Tidbits About the U.S. Income Tax

The concept of the income tax is considered to be modern, first implemented in England in 1798 to finance the Napoleonic Wars. In the original days of America, there was no income tax; it was introduced in 1861 to finance the Civil War. In 1895, the U.S. Supreme Court declared the income tax on property unconstitutional. Congress bypassed this ruling by amending the Constitution to permit tax "on incomes, from whatever source derived, without apportionment among the several states".

>The tax rate was only 1% on taxable net income above $3,000 in 1913, afterwards rising to 7%
>The top rate rose to 77% during World War I; when the war ended, the rate went back down to 25%
>During the Great Depression and World War II, the top rate went back up to 75%, soaring to 94%. After the war, the top rate remained 91% until 1964
>The top rate was lowered to 70% in 1964
>Thanks to President Reagan, the top rate was reduced to 50% in 1981, and then to 28%
>The top rate rose in the 1990s to 39.6%
>The latest tax cut lowered the top rate to 35%
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