A History of Taxation Prior to the Income tax
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James Madison
In early America there was no income tax; all taxes were raised in other ways. In 1789 James Madison proposed that the necessary revenue be raised by placing a tax on imported goods. This proposition passed and the tariff of 1789 went into effect (Appleby, 211). Later, Alexander Hamilton proposed that the government place a tax on whiskey, a consumer product. Although this tax angered some grain farmers, it helped produce sufficient revenue for the government, and also targeted a vice in society (Appleby, 213).
A brief History of the Income Tax
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The 16th Amendment
All the way up until the civil war, consumer taxes and tariffs were sufficient to support the government. But in 1861 the war's demand for more revenue led congress to pass a national income tax. This was repealed ten years later, and in 1894 another income tax was introduced, but was "ruled unconstitutional the following year by the supreme court" (Terrell). In 1913 the 16th amendment was ratified, giving congress the power to tax the income of the people (Terrell). Ever since its creation, the American people have suffered under the income tax, and various presidents have tried to solve the problem by lowering, raising, and fiddling with the system, but nothing has worked. Today, the income tax code has grown to an "almost indecipherable 67,500 pages of tax rules that accompany the U.S. income tax system" (Hoagland).