It’s tax time. We hope your pockets are being lined with refunds (and that you have plans to invest that refund with us). We did some digging to learn why April 15 is Tax Day. Here’s what we found, including a history of income tax.
On Independence Day in 1861, President Abraham Lincoln called Congress into a special session to explore the legislative options for war. The country was at odds and the South was on the verge of secession. One of the biggest problems Congress faced was the financial implications of a war. In order to raise enough revenue to support the Union troops and a war, Congress levied a three-part tax and tariff plan.
That plan, the Revenue Act of 1861 was drafted by the Chairman of the Senate Finance Committee at the time, Senator William Fessenden of Maine, who would later became the 26th Secretary of the Treasury. The act was drafted, passed the Senate and the House, and signed into law by President Lincoln, but not without some fanfare. Representative Thaddeus Stevens, Chairman of the House Committee of Ways and Means noted that the bill was “a most unpleasant one” and that the taxes and tariffs levied were “necessary evils”.
Necessary evil, indeed. Only a year later, the Act was repealed only to be replaced by the broader Revenue Act of 1862. The new broader act called for the creation of the Office of the Commissioner of Internal Revenue, imposed the first progressive income tax on Americans, and also expressly set forth an end date to income tax of 1866.
The government was still strapped for cash with the ongoing Civil War; and as a result Congress passed the Revenue Act of 1864 which increased the progressive tax rates. The Act ultimately expired in 1873. Two decades later, Congress again reformed tax law and passed the Wilson-Gorman Tariff Act of 1894. This act was challenged and found unconstitutional in the Supreme Court case Pollock v. Farmers’ Loan and Trust Company.
Flash forward almost another two decades to when the 16th Amendment was ratified giving Congress the legal authority to tax all incomes. The amendment was adopted February 3, 1913 and Congress chose March 1 as the filing deadline. Tax Day was moved to March 15 with the Revenue Act of 1918. And in 1955, Tax Day was moved to its current date, April 15.
We like to think of April 15 at GROUNDFLOOR as Investment Day rather than Tax Day. So, join the community of 3,200 and growing and celebrate Investment Day with us by funding a loan today.