Presidents Day has evolved quite a bit. From being a day to celebrate George Washington’s birthday to a day of remembrance for all Presidents to even adding other patriotic figures significant to specific states. A day to remember and celebrate all past and present Presidents of the United States, we thought wed honor this day by delving into a topic fitting for this time of year and holiday. As you’re busily engaging in Tax Season, do you ever wonder what the origins of this annual tradition is? While some of us may have a vague idea, others of us may have forgotten about the details since our last high school history class. Lets take a closer look at the timeline of the history of income tax in the U.S.!
While the official beginnings of income tax on individuals is linked to the passage of the 16th amendment, its origins actually date much further. During the era of the Civil War, Congress passed the Revenue Act in 1861. Signed by Abraham Lincoln, it imposed an income tax to be levied, collected, and paid on all personal incomes in the United States to aid in funding the war and its expenses. A decade afterward, the tax was repealed.
About twenty years later, in 1894, Congress enacted the Federal income tax which imposed a 2% flat tax on corporate and individual income, making it so that wealthy people should be paying more and lessening the financial hardship of the poor. However, a year later, the U.S. Supreme Court ruled it as unconstitutional since it was a direct tax not apportioned to the population of each state.
This brings us to the ratification of the 16th amendment on February 3, 1913. Proposed by President Howard Taft in 1909, the amendment was able to remove such an objection, allowing the Federal government to tax individuals and corporations incomes without consideration of each states population. This became a permanent fixture in the U.S. tax system today.
A fun fact that you may have not known is that April 15th wasn’t always the deadline. The original filing date was noted as March 1st by Congress. It then got pushed to March 15th in 1918 until the tax overhaul of 1954 when the date was moved to April 15th. And the rest, as they say, is history!
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