Did You Know?

The first working income tax actually passed Congress during the Civil War. Although collection was problematic, in 1861 Congress did enact an income tax of 3 percent on earnings between $600 and $10,000 a year. Earnings over $10,000 a year (about $170,000 in today’s dollars) were subject to a tax of 5 percent. This first income tax was repealed by 1872.

A later version was enacted in 1894 without a constitutional amendment and was rejected by the Supreme Court as unconstitutional in 1895.