The History of Taxes in the United States

Most of the taxes Americans pay today have been around for over two centuries. One of the oldest taxes is the estate tax which was decreed in 1797 but was then canceled and reinstituted over the years – this is usually done in reaction to the need to fund wars. In 1916, the modern estate tax was put into effect, and in 1924, the gift tax was enacted. The origin of individual income tax is usually quoted as the passage of the 16th Amendment which was passed on July 2, 1909, by the Congress and ratified on February 3, 1923.

From the 1920s to 1930s, multiple taxes were created. The first state to implement sales taxes was West Virginia, and this was done in 1921, then in 1933, 11 more states follow and 18 more by 1940. Montana, Delaware, Oregon, Alaska, and New Hampshire are the only states as of 2010 without sales tax. In January 1937, the first Social Security taxes were collected and not until 1949 before benefits were paid.

A type of federal income tax; the alternative minimum tax wasn’t implemented until 1978. After deductions, this system uses a particular type of rules to calculate taxable income. Those are just a few of the several taxes Americans are required to pay. Some of the other taxes include alcohol and cigarette taxes, aviation taxes, energy taxes, state income taxes, property taxes, and telecommunications taxes.

According to the Tax Foundation calculation in 2009, on the average, Americans had to work from the 1st of January to April 11th just to make the amount of money they would pay in taxes over a year, and this is usually referred to as Tax Freedom Day. It is defined as the precise date when an American has paid his/her burden of tax for the year – this, however, depends on states due to the disparities in state taxes.

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