From Lincoln to Clinton
Paying off the Civil War
* 1862: Abraham Lincoln enacts and emergency measure to pay for Civil War: minimum 3% tax rate.
* 1872: Lincoln income tax law lapses.
* 1894: A 2% federal income tax law is enacted.
* 1895: Income tax is ruled unconstitutional by the U.S. Supreme Court in Pollack vs. Farmers Loan & Trust.
Blame it on Wyoming
* 1909: The 16th Amendment authorizing Congress to collect taxes on income is proposed.
* 1913: Wyoming casts the 37th vote, ratifying the 16th Amendment. One in 271 people pays tax (1% rate).
Tinkering Begins
* 1926: The Revenue Act of 1926 reduces taxes because too much money is being collected.
* 1939: Revenue statutes are codified. One in 32 citizens pays (4% rate).
* 1943: One out of three people pays income taxes. Withholding on salaries and wages is introduced.
* 1954: The 875-page Internal Revenue Code of 1954 passes. It is considered the most monumental overhaul of the federal income tax system to date, with 3,000 rule changes.
* 1969: The Tax Reform Act contains major amendments to the 1954 overhaul.
* 1984: The Reagan Tax Reform Act is most complex bill ever, with more than 180, technical corrections.
* 1986: The Tax Reform Act reduces tax brackets from five to two.
The Latest Fine-Tuning
1993: Bill Clinton’s Revenue Reconciliation Act passes by one vice presidential vote.
1995: A major budget stalemate shuts down the government. Clinton vetoes the Revenue Reconciliation Bill of 1995.
1996: Clinton signs the Taxpayer Bill of Rights 2.
1997: Taxpayer Relief Act brings more than 800 changes: child tax credit, Roth IRAs, capital gains tax rate cuts, breaks for higher education.
Source: CCH Inc.
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