Legislation1862
First Federal Income Tax Collected
The Revenue Act of 1862, signed by President Lincoln, imposed the first federal income tax in American history to fund the Civil War. The law established the Bureau of Internal Revenue, predecessor to the IRS, and taxed incomes above $600 at a rate of 3 percent.
Why It Matters
The Civil War income tax established the precedent for federal taxation of individual income, a power that would later be permanently authorized by the 16th Amendment in 1913.