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.