A Look at the History of the Income Tax

  
     
  By: Mark Randall  
 

US Citizens are required to pay federal income tax. The collection of this tax allows for the government to provide important services including those services that protect the country from outside threats. But have you ever wondered how the income tax came about? Here's a brief look at the history of the income tax.

Article 1, Section 8, Clause 1 of the US Constitutions allows the United States Congress to impose an income tax on its citizens. But this wasn't used until the American Civil War in 1861. The Revenue Act in that year allowed for the collection of about a three percent tax on any income over $800. The tax act was repealed a year later in 1862.

Perhaps the main proponent of federal income tax was founder and Federalist, Alexander Hamilton. Hamilton wrote about taxation in Federalist No. 33 under the pseudonym Publius. There, Hamilton writes that the Necessary and Proper clause of the Constitution should provide grounds enough for the federal government to tax individuals.

Since then, the court system has held that taxes directly to the people and property are acceptable under the law. Since the inception of federal taxes in the 1800s, we have come to know many types of taxes. For example, we pay Social Security, Medicare and employers pay payroll taxes. However, most of our taxation comes from federal income tax.

The Internal Revenue Service (IRS) processed about 150 million tax returns in 2008. More recently, the IRS has come down hard on tax evaders as they try to collect back taxes. Tax preparation is often difficult for people to understand and can lead to mistakes that could have a devastating effect on a person's financial well-being. If you find yourself facing liens or penalties from the IRS, it's a good idea to contact a professional experienced in tax resolution who can help you resolve the situation.


  
  Article Source: http://yourfinance.co.za   
     
 
About The Author
If you are facing an IRS audit or have other tax issues, contact the experts at Guardian Tax Resolutions today by visiting Guardian Tax Resolutions.

 		  
     
 
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