The History of the U.S. Tax System

The History of the U.S. Tax System The history of the United States tax system is something that each and every person should understand. There are two main reasons that the history of the tax system is important. The first reason is that the knowledge of the how the tax system worked will help the people who are a part of the tax system process to make educated decisions upon future taxes and things which would affect the taxes. The second reason is that knowing about the history of the United States tax system will help the people making tax decision to avoid crucial mistakes that have occurred in the past. Not only will the decision makers be able to learn from previous mistakes, but they will also be able to know what a likely…show more content…
At first it was only separate states which taxed the people but many of the patriotic leaders pressed for a central government. By 1800, the federal treasury was created and put in charge of collecting taxes and paying the national debt. Because the American people voted for the taxes and the central government, they were mostly satisfied with the taxes being charged. In the period of 1776-1800 taxes on imports were the main taxes imposed upon the American people. Tariffs were standard throughout the United States and increased only by a small fraction of a percentage throughout the first thirty years following the revolution. The taxes had actually been significantly lowered from the previous British taxes before the revolution. The new government was steadied greatly by the taxes/tariffs upon the goods which were entering into America. The national debt was decreased by twenty million dollars by 1800 and the national reserve was increased by about six million dollars. During this time the United States had quickly become one of the strongest countries in the world ranking just below the superpowers at the time (England, France, Spain, and Portugal). During the early 1800s the tax system remained virtually untouched while the government continued paying off debt. During the War of 1812 however, Congress passed sales taxes for items such as liquor and sugar to help with the war effort. These sales taxes were able to be done away with
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