Taxes: Where Money Meets Power (Infographic)

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No taxation without representation is a mantra that has been meant to guide the United States Tax system since its inception. However, a brief look at how the government has actually used our tax dollars versus their claims for the purpose of the money can reveal some disturbing inaccuracies. Starting in 1791, taxes began showing up around an internal system that dealt with money and the trade of distilled spirits, tobacco, snuff, bonds, and slaves. With the start of the War of 1812, a serious financial burden was put on the United States. In order to meet this financial demand, the first sales tax was placed on precious metals, jewelry, and watches.

By 1817, Congress took it upon themselves to to do away with the internal taxes that started years earlier in order to rely exclusively on the income from tariffs on imported goods. The next major change to the tax system was again due to war. The Civil War effort was supported through the enacting of the nation’s first ever income tax law. This law made it mandatory for their to be a 3 percent tax on income up to $1,000, an additional sales tax, and an inheritance tax. This bill also spurred the creation of the Internal Revenue service in order to enforce the tax code in 1862. The tax code still was controversial in the eyes of many. However, Congress retained its right to enact a national income tax thanks to the 16th amendment despite the fact that the Supreme Court ruled it to be unconstitutional in 1895.

Congress took advantage of this right in 1913, and the 1040 tax return form first came into existence. As the years went by, the tax rates on income rose and fell according to the political environment. Taxes increased with the advent of World War I. At the close of the war, they sharply fell. When the Great Depression struck, taxes rose once more. In addition to being closely linked with war, the corruption that has been made possible thanks to the U.S. tax system also creates a long and surprising list of facts. In 1951, 66 IRS agents were stripped of their rank for taking bribes and committing extortion. The tax system was used to intimidate and harm political activists as well. Nixon encouraged the auditing of all his political components, and the FBI seized over 200 tax returns of “subversive” political groups such as the Black Nationalists and Anti-Vietnam activist.



Tax Infographic

Tax Infographic- How it all started

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