The History of Federal Income Tax Brackets

Federal income tax brackets did not always exist in America. In fact, income taxes were not enacted until 1862 in order to support the Civil War. Prior to this time, all taxes were taken based on tariffs or sales. Ever since, however, income tax has been a key part of government revenue.

The 16th Amendment

Income taxes became a permanent fixture of the United States Constitution in 1913 with the passing of the 16th Amendment. The amendment allowed Congress to pass taxes on income, and the first revenue law was born to tax both households and businesses. It took only two years for the government to collect over one billion dollars in revenue from income taxes.  

Tax and Politics

Marginal federal income tax brackets determine how much a person owes the IRS based on income. This means a person making more money is taxed not only more money but actually a higher percentage of their income. The income tax bracket has been a heated debate in every presidential election since its inception. Today, politicians still argue over the fairness of income tax brackets and whether another system would work better.