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Before the 16th Amendment, a federal income tax was technically prohibited, as stated in Article I, Section 9 of the Constitution : "No capitation, or other direct, tax shall be laid, unless in proportion to the census or enumeration herein before directed to be taken." Therefore, the federal government needed to rely on land sales, excise taxes, and tariffs to boost revenue. In times of crisis, however, these measures were just insufficient. During the Civil War, when the Union desperately needed capital, Congress passed the Revenue Act (1861), which included a supply for the country's first income tax. Out of necessity, the Supreme Court overlooked the action's unconstitutionality. The initial rate was a 3% tax on all incomes over $800, or $21,000 in 2013 dollars, but in 1862 Congress amended the act and introduced a multi- tiered system, using a three % tax on all incomes up to $10,000 and a 5% tax on any over this sum. Additionally, the duty has been deducted directly from the worker's paychecks they'd not miss the money. Congress understood it couldn't accumulate the blatantly unconstitutional tax any longer than was needed, so in 1872, a few years after the end of the war, the Revenue Act was repealed. On the other hand, the idea of an income tax couldn't be abolished. You will find many, particularly among the farmers in the west and south, who considered that the wealthy eastern bankers and industrialists weren't paying their fair share. At the urging of those malcontents, Congress passed another income tax bill in 1894 that imposed a 2% tax on all incomes over $4000, or $21,000 in 2013 dollars. The Supreme Court instantly hit it down as unconstitutional. This activity still didn't kill the thought, and progressive...