After the Spanish, French and British lost control of the colonies, is when the history of taxation and money started in the United States. The first thing to be implemented were Tariffs and then taxes. These went into affect after English influences were no longer present in the states. Taxes were collected prior to them being found as illegal according to the constitution. The 16th Amendment helped to rectify the situation and taxes were put back into place.
Gathering money from its citizens is a big income source for the government. In the beginning it was tariffs. These were used up until World War I and then abandoned for the income tax. While in use, they helped to protect local business. They did so by helping to encourage getting everything domestically. They also divided a newly forming United States in two. The North and South could not agree on prices for them or on the agreement between England.
Instead of introducing one regulated tax into the system there were many smaller ones. An example of this is the excise tax. The revenue from this income source is most often put into a fund for specialty projects. Alcohol, fuel and tobacco are all items that have this tax on them.
Since 1916 rates have gone up and down numerous time over the decades. Generally rates in the 1916s would start out around one percent for lower incomes and six percent for the ones in the six figures. Following suit, rates still fluctuate severely up and down to this day.
World War II brought with it payroll and quarterly tax payments. Ninety one percent was the average withholding rate in 1951. It rose slightly the next two years and then reverted back to ninety one percent for almost the next ten years. Starting in the early sixties the tax rate dipped into the seventies and by 1982 it was at fifty percent.
Varying rates have been around for centuries and are here to stay. To ease the burden of taxes, government programs and incentives were introduced. Things like child credits and the Earned Income Credit are in place to help the public. The additions to the tax law are most generally going to benefit lower incomes and are meant to help offset the amount of money paid.
Love it or leave it the taxes are here to stay. They have made it through wars and a nation wide depression. They will make it into the future and continue to change. The history of taxation and money continues to be written. Lets see what is brings in the future.
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