The First Income Tax

The very first income tax imposed by the Federal government was in 1862 because President Lincoln needed money for the war effort to prevent the Southern States from becoming an independent country. The tax ended after the war and was later declared unconstitutional by the Supreme Court in 1894. Before 1862, the country was able to cover the cost of government and defense with import duties and excise taxes. A per capita property tax was imposed twice by the Federal government on the States to raise money when extra was deemed needed.