A Taxing Amendment, The Revenue Act

Prior to the 16 th revision, federal income tax was technically illegal as stated in Article 1, paragraph 9 of the Constitution. Direct taxes. I was robbed. "Therefore, the Federal Government must rely on land sales, consumption taxes and tariffs to increase revenues. However, in times of crisis these measures are simply not enough. During the Civil War, when the Union urgently needed funds, Congress passed the income law (1861), including the provision for the country's first income tax.

In 1913, the Constitutional Amendment No. 16 used income tax as a permanent fixation of the US tax system. This amendment gives legislative authority to the income of Congress and enacts tax law that imposes tax on individuals and companies. In fiscal year 1918, annual internal revenues exceeded $ 1 billion for the first time and reached 5.4 billion dollars in 1920. With the advent of World War II, employment has increased and taxes have increased to $ 7.3 billion. Tax withholding tax was introduced in 1943, taxpayers increased to 60 million by 1945, taxes increased to $ 43 billion.

In 1913, according to the amendment No. 16 of the Constitution, the income tax system became permanent. The amendment gives Congress the ability to legally assess individual and company income taxes. It took less time for the government to collect a lot of taxes. The annual income in 1918 surpassed $ 1 billion, tax revenues exceeded $ 5 billion by 1920. As early as 1986, the income tax system has undergone tremendous changes. President Ronald Reagan signed the Tax Reform Law, which lowered individual tax but raised business tax. Perhaps the most important aspect of this law is to lower the maximum income tax rate? 50% to 28%

In 1981, the United States fell into a recession, the unemployment rate rose, the economy was damaged President Reagan proposed the "Economic Recovery Tax Law". This is an action aimed at "revision of the domestic tax law in 1954" by reducing income tax and incentives for business. Tax cuts on companies are expected to stimulate economic growth and eventually stimulate the economy. Over the years, the Kentlos tax reduction has been controversial, and most of them provide a very necessary shock to get out of the depression from what is considered to be radical if unprecedented It is fierce. Critics argue that the bill worsened the budget deficit and advocates assert that this will actually help expand the economy