1862 (to 1872)
The first time Congress imposed an income tax was during the Civil War when the North was going broke. It was not challenged because doing so would have been unpatriotic. The tax was in place until 1872 to pay down debts from the war.
The first time Congress imposed an income tax was during the Civil War when the North was going broke. It was not challenged because doing so would have been unpatriotic. The tax was in place until 1872 to pay down debts from the war.
Another income tax was imposed on both individuals and corporations. The Supreme Court struck down the individual income tax as unconstitutional in 1895.
Finally, the 16th Amendment to the Constitution was approved. The 16th Amendment modified Article I, Section 9 and states simply that "...Congress shall have power to lay and collect taxes on incomes, from whatever source derived, without apportionment among the...States, and without regard to any census..."
By the end of the year the individual income tax was also in place, as it has been ever since. The many provisions of the income tax were passed through the years, and were found scattered throughout the federal laws.
The income tax provisions were consolidated into a single area of federal law. Thus was born the Internal Revenue Code of 1939.
This problem of disorganization begins again, and another consolidation is undertaken by Congress, yielding the Internal Revenue Code of 1954, which renders the Internal Revenue Code of 1939 irrelevant.
After several years of work, a massive overhaul of the U.S. tax system is approved by Congress, yielding the Internal Revenue Code of 1986, which renders the Internal Revenue Code of 1954 irrelevant. Students should use only the Internal Revenue Code of 1986 (aka IRC or the Code).
President Bush approves the Economic Growth and Tax Relief Reconciliation Act of 2001 and the Jobs and Growth Tax Relief Reconciliation Act of 2003. These acts decreased many income tax rates, reduced the capital gains tax, increased the child tax credit. He signed Medicare Part D into law in 2003, significantly expanding that program, without new sources of tax revenue.
President Obama signed The American Taxpayer Relief Act of 2012. The act gives permanence to the lower rate of much of the Bush tax cuts, while retaining the higher tax rate at upper income levels and establishes caps on tax deductions and credits for upper income earners. It does not tackle federal spending levels to a great extent, due to recession.
President Trump signed the Tax Cuts and Jobs Act into law on Dec. 22, 2017. The law cuts corporate tax rates permanently and individual tax rates temporarily. It permanently removes the individual healthcare mandate, a key provision of the Affordable Care Act. Most of the individual tax provisions expire after 2025.