With the Independence Day holiday quickly approaching (can you believe it’s already July!), I wanted to switch things up a bit this week. As we all aware, the current administration is looking to make a major overhaul to the tax code this year. Although I have researched the history of the tax law changes in the past, I thought that I needed a good refresher. For your reading pleasure, below is a list of tax law changes over the years that have drastically impacted all Americans:
- 1862 – President Lincoln signed into law a measure that created a Commission of the Internal Revenue and levied the first set of income taxes to help finance the Civil War.
- 1872 – Income taxes were repealed.
- 1894 and 1895 – In 1894, The Wilson Tariff Act reversed the 1872 decision. Next year in 1895, the Supreme Court ruled this unconstitutional and income taxes were removed again.
- 1913 – The 16th amendment was ratified that stated Congress had the power to collect income taxes and the first Form 1040 was introduced.
- 1918 – The Revenue Act of 1918 imposed a tax structure with a top rate of 77%.
- 1942 – The Revenue Act of 1942 increased taxes and the number of Americans subject to the tax. It also created tax deductions for medical and investment expenses.
- 1943 – The Current Tax Payment Act passed and required employers to withhold taxes from employee’s wages and remit them quarterly.
- 1944 – The Individual Income Tax Act created the standard deduction for Form 1040.
- 1954 – The filing deadline for individuals was moved from March 15th to April 15th.
- 1986 – President Reagan signed into law the Tax Reform Act. The TRA re-codified Federal tax laws with 300 provisions. Limited electronic filing began this year as well.
- 2001 – The Economic Growth and Tax Relief Reconciliation Act was signed into law by President Bush and significantly cut taxes.
- 2013 – The American Taxpayer Relief Act was implemented. The ATRA increased tax rates, implemented additional taxes on earned and investment income, instituted deduction phase outs, and adjusted estate taxes.
Have a great July 4th holiday and be safe!