How Taxes Have Evolved Over the Years
The history of taxes in the United States began with the protest against British taxation without representation. Tax issues have significantly changed since this time period. However, they have always played a vital part in shaping our country.
Taxes in Colonial Times
The tax issue during colonial times was not about the amount of tax being collected, but whether the British parliament had the right to collect taxes while American colonists were not present in government. The Stamp Act and Tea Act were some of the taxes imposed that led to the Boston Tea Party.
The Start of Tariffs and Income Tax
Tariffs have played various roles in the trade policies and general economic history of the United States. Tariffs remained the largest source of federal income until World War I; after World War I income from tariffs was surpassed by income taxes. Income taxes began in the 19th century in order to help fund the war effort.
Modern Income Tax
Our modern version of the income tax has changed greatly due to different economic events. In 1916 congress readopted income tax; in 1918 top marginal income tax was increased to 77%; and during the Great Depression the marginal tax was increased to 63%. In 1991 the Bush administration made a deal with congress to 31% while the Clinton administration raised the marginal rate to 39.6%.
Conclusion
Taxes have always varied with the changing circumstances of American society. They have evolved and grown, but they have always been used to aid the public. Our economy is forever changing and growing and so are our tax rates.
Image credit: Kevin Krejci
