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Taxation in the United States, From Wikipedia, the free encyclopedia
The first federal statute imposing the legal obligation to pay a federal income tax was adopted by Congress in 1862, to pay for the Civil War. The 1862 levied a 3% tax on incomes above $600, rising to 5% for incomes above $10,000. Rates were raised in 1864. This income tax was repealed in 1872, but a new income tax statute was enacted as part of the 1894 Tariff Act. However, in 1895 the Supreme Court struck down a portion of the statute as unconstitutional — specifically, the tax on income from property — as an unapportioned direct tax.
At that time, the United States Constitution specified that Congress may only impose a "direct" tax if it apportions that tax among the states according to each state's census population. In its 1895 decision the Supreme Court held that a tax on income from property was a direct tax under the Constitution, and so had to be apportioned.
This article is licensed under the GNU Free Documentation License. It uses material from the Wikipedia article, Taxation in the United States