Theme 2: Taxes in U.S. HistoryLesson 1: Evolution of Taxation in the Constitution
Before the U.S. Constitution was ratified in 1788, the federal government lacked the power to raise revenue directly. Even after the Constitution was ratified, federal revenues came mostly from tariffs and excise taxes. These taxes tend to be regressive, because people with lower incomes had to pay a higher percentage of their income than did people with higher incomes.
During the Civil War, the federal government required much more revenue than the tariffs and excise taxes could provide. A tax on income was established in 1862 but was abolished after the war. The ratification of the Sixteenth Amendment in 1913 gave Congress the right to levy and collect income taxes. Income taxes tend to be progressive because they tax a larger percentage of income from high-income groups than from low-income groups.
The goal of American lawmakers has always been to balance the need to raise revenue, the desire to be fair to taxpayers, and the desire to influence the way taxpayers save and spend their money.
Activity 1: Taxes and the U.S. Constitution Compare the powers of taxation granted by the Articles of Confederation and the Constitution.
Activity 2: Historical Views of Taxation Discover how the colonists and Civil War Americans viewed taxes.
Activity 3: Tax Your Memory Is your memory taxed? Play this game of concentration to find out.
Complete the assessment page to test your understanding of the Evolution of Taxation in the Constitution.
What are the three goals of lawmakers when they create taxes?
Did You Know?
A tariff is a direct tax on imported and exported goods.
Test your tax trivia knowledge by answering the following multiple-choice question. Click on the correct answer. To assess your answer, click the Check My Answers button.
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