Happy (??) Belated 101st Anniversary to the 16th Amendment, which was ratified February 2, 1913.
As our income tax information comes in this month and we scramble to understand the complex laws that will determine how much we owe Uncle Sam for last year’s income, it is worth noting that the US did not have an income tax for most of its early history. The few tax records remaining, however, will provide interesting information to family historians.
An income tax was proposed during the War of 1812, based on the British Tax Act of 1798. (A few levels of irony there…) The proposal was made in 1814, but because hostilities ended with the Treaty of Ghent in 1815, this progressive tax of 0.833% to 10% was never implemented.
By the time of the Civil War, however, the need for a federal income tax was apparent to pay the high costs of war, and income taxes were imposed on personal income in 1861. Any income over $800 was taxed at 3%. The Revenue Act of 1861 was repealed but another tax was implemented in 1862.
In 1894, an income tax was again passed to compensate for the reduction of federal income due to the Wilson-Gorman Tariff, which also reduced tariffs. Income over $4,000 was taxed at 2%, which only affected about 10% of the households in the United States. In 1895, however, a Supreme Court ruling effectively made this an impractical tax to impose, due to constitutional limits on direct taxes needing to be apportioned by the states per the census enumeration. Thus technically no ‘income taxes’ were paid to the federal government until ratification of the 16th Amendment on 02 February, 1913.
Amendment XVI to the US Constitution:
The Congress shall have power to lay and collect taxes on incomes, from whatever source derived, without apportionment among the several States, and without regard to any census or enumeration.
“Excise” taxes, however, were imposed before this time, because it was possible to tax on property; such records may be found in the NARA records for the IRS. Some are available on Ancestry.com, such as the record above that shows Francis Helbling paid 85 cents excise tax on his two cattle (40 cents each) and one calf (5 cents tax). I have not proved that this is my ancestor, but it is possible since Francis X. Helbling was a butcher and lived in Pennsylvania at that time. Many families kept some cattle for their own use, too. I have also seen Civil War IRS records for other family members, but am not sure how to find those on my Ancestry tree without going through each head of household’s data sheet for the proper time period. It is great to find these records, though, as they tell us a bit more about daily life for our ancestors.
And I’ll bet our ancestors complained about paying taxes just as much as we do.
Notes, Sources, and References:
1) Source Information: Ancestry.com. U.S. IRS Tax Assessment Lists, 1862-1918 [database on-line]. Provo, UT, USA: Ancestry.com Operations Inc, 2008. Original data: National Archives (NARA) microfilm series: M603, M754-M771, M773-M777, M779-M780, M782, M784, M787-M789, M791-M793, M795, M1631, M1775-M1776, T227, T1208-T1209. Accessed 02/01/14.
2) http://en.wikipedia.org/wiki/Income_tax_in_the_United_States. Accessed 02/01/14.
3) Of course, other taxes were imposed such as road taxes, a poll tax to vote, etc. Those records are sometimes available as well.
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