The roots of the IRS

JJ PaladinStarred Page By JJ Paladin, 31st Mar 2014 | Follow this author | RSS Feed | Short URL http://nut.bz/mwonrt_-/
Posted in Wikinut>Writing>History

Born of necessity the IRS has its roots in rebellion and would become one of America's least favorite government agencies.

Where did it all begin?

One of the most reviled of all US Federal agencies is the dreaded IRS or Internal Revenue Service. This agency created to help fund the US Federal Government’s never ending spending appetite has its roots in rebellion.

In early 1861 President Abraham Lincoln, looking at the imminent secession of Southern states and the loss of their lucrative seaports, began looking at ways to make up lost revenue. Lincoln made inquiries of his cabinet members Edward Bates, Salmon Chase, and Gideon Welles wanting to know if he had the constitutional authority to collect duties on goods and services as well as import tariffs and property taxes. The end result was the Revenue Act of 1861 passed on August 5th 1861 and the first federal income tax statute of the United States. The income tax placed a 3% tax on all individuals whose annual incomes were above $800 per year

By 1862 however realizing the war was not going to be a short affair, the Lincoln administration passed of the Revenue Act of 1862 which established for the first time an Office of the Commissioner of Revenue. It also levied excise taxes on everyday goods and services and established the first graduated or progressive tax system in the US which separated citizens into multiple categories and taxed them based upon their abilities to pay. As the years would pass the revenue generated from this law was not enough to pay the burdensome debts the war was amassing and subsequent legislation would need to be passed.

After the Civil War and ten years after the original income tax law was passed the largely unpopular law was repealed, only to be revived once more by Congress in 1894. The subsequent year saw the Supreme Court rule the law unconstitutional, based upon the fact that the income tax was a direct tax not apportioned according to the population of each state.

In 1909 President Taft would recommend Congress propose a constitutional amendment that would give the government the power to tax incomes without apportioning the burden among the states in line with population. In 1913 Wyoming became the 36th and last state needed to ratify the 16th Amendment which established the federal government’s authority to enact income tax.

What's next

All governments throughout world history have levied taxes on its citizens to help pay off debts accrued by war and or other expenditures. Our country is no different and at times has had tax rates as high as 77% of income. Image that 77 cents for every dollar earned was going to the government. That’s simply outrageous. If we allow our leaders to keep spending money like they are doing now we may well see tax rates that high again.

This is why it is imperative now upon all our citizens to understand the implications of Lincoln's legacy, the establishment of the federal income tax system, and all that it entails. We are trusting our elected officials with our money and should they continue on the deficit spending track there will be dire consequences for all of us to include higher taxes.

In my opinion we cannot afford to maintain global hegemony for much longer. We simply do not have the revenue to be the world’s beat cop, and defender of the free world. It’s time for the other nations to pick up some the slack.

It’s time to win the war for peace as we cannot afford to wage war in perpetuity. No nation can do that and survive.

We need to look at ending entitlement programs that do not change people’s lives for the long term. Investment in education and skill training instead of extending unemployment benefits for example.

We need to change our foreign policy so that it’s not so reliant on dollar diplomacy. We cannot afford to keep giving billions and billions in aid to foreign nations, some that do not even like us or have the same values.

Our leaders need to represent WE the People and not spend our hard earned money that the IRS is so hard at work taking away from us.

Tags

Abraham Lincoln, Civil War, Entitlement, Govt Spending, Irs, Revenue Act Of 1861, Revenue Act Of 1862, Ron Paul, Tax, Taxes

Meet the author

author avatar JJ Paladin
I have 15 yrs experience as a background investigator for the US govt. My writing will focus on American traditions, culture, history, and current events.

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Comments

author avatar Steve Kinsman
1st Apr 2014 (#)

It would be better to keep the unemployment benefits you call entitlements in place and do away with the billions in direct subsidies and tax breaks given to the corporations - welfare for the rich. That would shrink the deficit big time, don't you think?
Very well done article, J.J. Thank you.

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author avatar Funom Makama
1st Apr 2014 (#)

A great right J.J Paladin, I am not too conversant with the American business systems and news... But going down memory lane on the IRS is a top notch info which is well appreciated. Now I know the IRS better.

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author avatar JJ Paladin
1st Apr 2014 (#)

Thank you all. @Steve yes I agree. I think the Founding Fathers would be just as upset at crony capitalists today as they would a govt dependent citizenry.We need to hit the reset button but I honesty don't know how that would work.

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