August – Tax Fairness for Americans Abroad Month
August 5th marks a significant moment in US tax history. On August 5th 1861, President Abraham Lincoln signed the Revenue Act of 1861, which imposed the first ever federal income tax, during the first year of the Civil War. The Revenue Act of 1861 taxed imports, provided for a direct land tax, and imposed a tax of 3 percent on individual incomes over $800 (approximately $18,000 today and then a higher rate after that). The taxes were levied to help fund war efforts and although Lincoln could only tax the northern states, he was able to impose the tax without passing a constitutional amendment. The income tax remained in force for 10 years and then repealed but was eventually replaced in 1913 with the ratification of the 16th Amendment of the US Constitution.*
Congress must be educated! Tax policy originally instituted 158 years ago needs to continue being reformed to meet the global, cross-border, international environment in which US citizens of today live and work. Learn more about the United States history of taxation - the changing nature of both the needs for an income tax and tax polices themselves, by visiting the websites below. Learn about ACA’s efforts for Tax Fairness for Americans Abroad with Residence-based taxation (RBT).
- Blame Abraham Lincoln for the nation’s first national Income Tax, August 5, 2019, National Constitution Center
- Income Tax Records of the Civil War Years, Winter 1986, Vol. 18, No. 4 | Genealogy Notes, By Cynthia G. Fox, The U.S. National Archives and Records Administration
* Source: Politico August 5, 2019 and the Constitutional Center/2019
Be sure to watch this space and follow ACA on Facebook and Twitter! More community efforts to educate Congress and support passage of tax legislation for US Citizens living overseas coming soon. Join us by becoming an ACA member or by donating to ACA.