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This Day in Legal History: The First Federal Income Tax
On August 5, 1861, President Abraham Lincoln signed the Revenue Act of 1861, and with it created the first federal income tax in the history of the United States. The country was three months into the Civil War, the Union’s costs were exploding, and the government needed money on a scale the old system of tariffs and land sales simply couldn’t provide. So Congress reached for something new: a tax of three percent on annual incomes over $800.
The 1861 income tax was, in practice, a bit of a false start. The $800 threshold meant only a…
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