As we enter the 2020 tax season, however unwillingly and with gritted teeth, you might be interested to know that Americans did not always pay personal income taxes. The policy of taxing personal income began with the onset of the Civil War, when Congress passed the Revue Act of 1861. This was a new direction for a Federal tax system based mainly on excise taxes and customs duties. However, Congress soon realized there were certain inadequacies with the new income tax policy. No taxes were actually collected until the following year, when a new law was passed on July 1st. This law made important reforms to the 1861 law, many of which we find in various forms today. These include a two-tiered rate structure based on income, a standard deduction ($600), and taxes being “withheld at the source” by employers to ensure timely collection. By now you must be wondering
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