Congress Creates An Income Tax To Fund The Civil War

1862

Congress creates the Commissioner of Internal Revenue and enacts the first national income tax to pay war expenses. (The Confederacy also adopts an income tax.) At first, a flat 3 percent tax was set on all incomes greater than $800. This is later modified to 5 percent for incomes between $600 and $5,000, and 10 percent for incomes greater than $5,000. After the war, in 1872, Congress repeals the income tax.