Tax Time!
Tax Day is the day on which individual income tax returns are due to the federal government. When the country was in its infancy, it struggled to raise funds from the 13 original states. The government collected the first income tax during the Civil War (1862 – 1872) to fund the war and its costs. Early taxes were based on assessments, not voluntary tax returns. They set a flat rate of 3 percent on incomes higher than $800. Over the next four years, Congress expanded the tax as members cut the amount of income that could be exempted and introduced higher, graduated rates. By 1865, the last year of the Civil War, the highest income tax rate, 10 percent, was applied to income in excess of $5,000. Congress,