Friday, August 5, 2011

Happy Birthday to the Income Tax

CATHERINE RAMPELL
CATHERINE RAMPELL

Dollars to doughnuts.

Happy birthday to the federal personal income tax, which turns 150 today.

Dollars to doughnuts.

In 1861, President Abraham Lincoln needed cash to help pay for the Civil War. So, on Aug. 5, 1861, he signed the newly-passed Revenue Act, which imposed the first federal income tax.

The law imposed a 3 percent tax on annual incomes over $800. In today’s dollars, that would refer to an annual income of $20,400.

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