Historical Nonfiction

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The Invention of Income Taxes

Before the Civil War, the government received most of it revenue through tariffs — taxing goods as they came into the ports. This system worked great (especially since there was no standing army and the largest part of the federal government was the postal service). But if there was a war, when the government needed money most, it’s tariff money disappeared. In the 19th century, war meant blockaded ports, sunk ships — and almost no revenue from tariffs.

So during the Civil War, Congress decided it had to try an income tax. It devised a really clever plan to get people to pay. It made the tax returns public. So every Tom, Dick, and Harry could check that their no-good brother-in-law paid what he deserved.  Even president Abraham Lincoln’s taxes were released. He paid $1,296 in income tax in 1864.

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