History and Legality of Income Taxes

The history of taxes in the United States involves many intervening factors which influenced circumstances where taxes would be levied, as well as income tax rates. In the past, personal income taxes were created and often increased in order to fund wars. Other intervening factors, such as lawsuits, would also have an impact on income tax rates and laws.

In the late seventeen hundreds, taxes on items such as corporate bonds, and even on slaves, were used to support the running of the countries government. However, those taxes were ended when the country began to place international tariffs on imported items.At one point, congress tried to support the country through taxes placed on items such as tobacco and alcohol. In the end, Congress decided that a nationwide personal income tax was the best way to support the running of the countries government.

The United States first imposed a personal income tax on citizens in order to help fund the Civil war. At the same time, an inheritance tax was introduced. An Act in 1862, allowed taxes to be collected from citizens in default, by seizing individual property or through prosecution. At one point, Congress focused on taxing specific items such as tobacco and alcohol, in order to avoid taxing income.

Although the income tax was eliminated in 1872, it was brought back in 1894.There was a court case in which the Supreme Court decided that personal income taxes were unconstitutional. In response to the Pollock case, the sixteenth Amendment was ratified, adding personal income tax to the Constitution. There are still many legal challenges on personal income taxes, even today. There are groups of citizens around the country that claim that the Sixteenth Amendment was never properly ratified and therefore, personal income taxes were never actually legalized in the United States Constitution.

Ratification of the Sixteenth Amendment legalized income taxes in all forms. Prior to the Amendment, personal income taxes were declared unconstitutional in the Pollock case. Currently, income tax rates are based on several factors. In fact, each state determines its own income tax rates based on specific intervening factors, such a total salary minus allowable deductions.

Personal income tax laws continue to evolve, including changing income tax rates. Current events, such as a poor economy, often prompt congress to make changes to the personal income tax laws, including income tax rates.

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