The Waterbury Democrat., 1941-09-24

Washington, D. O., Sept. 24, l94l Blood, sweat, tears = and income taxes--inevitably have accompanied the major wars of the United States. The first Federal income tax ley- led was a war measure growing out of the Civil war and was accepted by the people in spirit of patriot ic fervor. During the World war, the same tax was the governments principal revenue producer, an d Congress has turned to It again to meet the rising expenses of the present emergency.
 The acceptance of the first Fed eral income tax authorized on Au- gust s, 1861, illustrated the zeal with which the people of the United States met the taxation necessary to finance Civil War expenses. Dr. Dewey In his Financial History of the United States" tells of foreign minister who remarked to William H. Seward, Secretary of State, that he had been taught something new about the strength of popular gov- ernment. T was not surprised" he said, Ito see your young men rush. ing enthusiastically to fight for their flag. have seen that in other countries. But I have never before seen a country where the people were clamorous for taxation" The first tax on incomes was at the rate of three per cent on incomes over $500. The tax was increased by the revenue acts of 1862 and 1865. At its height, the tax rate was five per cent on incomes between $500 and $5 900 and 10 per cent on incomes over $5,000. As the war emergency waned, the exemption was increased to $l 900 and in 1867 to $2,000. The tax was repealed in 1872. Collec- tions from this source during the entire period that the tax was in ef- feet amounted to about $S47 ,000,0 ,000.
 Second Income Tax 1894
 A second Federal income tax of two per cent on all incomes above $4,000 was imposed by the Tariff Act of 1894. Many arguments were ad- vanced against 1t and the charge was made that it was bid for the support of the poor and that it dis criminated against the well-to-do. Support for the measure was sec- tional. The South and West were for 1t and the New England States, New York and Pennsylvania opposed it bitterly. The tax was declared un- constitutional by the United States Supreme Court which held that it was a direct tax" which under the Constitution must be apportioned among the States according to popu- lation.
 The Sixteenth Amendment to the Constitution, ratified in February, 1913, authorized Congress to lay a tax on incomes without apportson- ment among the States. The Tariff Act of 1913 imposed a tax of one per cent on the incomes of citizens and residents of the United States and nonresident aliens who derive in- comes from the United States. Sim gle persons were permitted an exemption of $3,000 and married couples and heads of families, $4,000. No exemptions were allowed for de- pendents. Surtaxes ranged from one per cent on incomes of $20.000 to 6 per cent on incomes of over $500, 900. The Act continued the one per cent tax on the income of corporations which had been levied by the Payne Aldrich Tariff Act of 1909. This was the beginning of the World War income taxes, which rose as high as six per cent on the first s4.000 of the net income of individuals and l2 per cent on the balance over s4.000 and dropped exemptions to $i000 for single persons and s2.000 for married couples or heads of fam- ilies. Surtaxes ranged from one per cent for incomes of S5.000 to 05 per cent on incomes Of ono million dcl- lars or more. Corporations were