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A brief history of taxation in the US

1773

Fed up after years of taxation by the British government and in response to the Tea Act, Colonial activists chuck East India Company tea into Boston Harbor.

 

1787

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US Constitution is adopted, and federal government gets power to levy taxes. President Washington sends troops to western Pennsylvania to quell violent reaction to Congress’s whiskey tax.

1861

To fund the Civil War, Congress establishes a federal income tax. It is allowed to expire in 1872.

1894

Congress passes the first peacetime federal income tax, but Supreme Court rules it unconstitutional the next year.

1909

At President Taft’s urging, Congress imposes a 1 percent corporate tax and sets to work on an amendment that will allow the collection of a federal income tax.

1913

Congress passes 16th amendment, establishing a federal income tax. The top tax rate is 7 percent (on income above $500,000).

1914

Bureau of Internal Revenue unveils first 1040 form. Within a year, members of Congress complain the form is too complicated.

1917

Top personal income tax rate shoots up to 67 percent.

1944

Top rate hits high of 94 percent. Stays above 80 percent into 1960s.

1978

California voters approve slashing property taxes with Proposition 13, sparking national movement.

1982

Passed in 1980 and implemented two years later, Massachusetts Proposition 2½ reshapes municipal landscapes by limiting the revenue a city or town can raise through property taxes.

1986

President Reagan’s tax reform passes, and the top personal income tax rate drops to 28 percent (effective two years later).

1988

Republican presidential candidate George H.W. Bush invites voters to read his lips: no new taxes. Two years later, he reverses his stance in a bid to reduce national deficit.

1993

President Clinton pushes through deficit-reduction plan that raises taxes on energy, Social Security benefits, and high-income households.

2001

President George W. Bush pushes through wide-ranging tax cuts, set to expire in 10 years.

2009

Throughout the spring, protesters nationwide gather for rallies called “tea parties” in show of frustration with government spending.

2010

President Obama strikes deal with GOP leaders to extend Bush tax cuts through the end of 2012.

--Stephanie Vallejo
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