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Taxation courts comparable to the tax court today to

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taxation courts (comparable to the Tax court today) to try those Americans who were ignoring the new laws, which at the time of these taxes were basically all colonists who were ignoring. Perhaps the most famous episode of rebellion against the unfair taxation occurred during the Boston Tea Party when colonists dressed as Indians and dumped tea into Boston harbor (www.history.com). With American independence in 1776, the leaders of the new country had the task of coming up with revenue in order to have a functioning government. With the ratification of the Constitution of the United States in 1787, the locus of power was shifted from the individual states, 13 at the time, to a centralized national government. Congress now had the authority to dictate fiscal decisions regarding the nation, while also having the power to tax the people of the new nation. One of the newest powers that Congress was granted with the ratification of the
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Constitution of 1787 was the power to coin money and impose new tariffs. (www.taxhistory.org). This was necessary in order to help pay off the debts of the young nation especially those from the Revolutionary war. High debt during times of war and subsequent increase in taxes is a common trend that continues in the country up to the present day. The Constitution also granted Congress the power to collect excises and levy taxes on the people of the new nation. In 1791, Alexander Hamilton suggested a tax on whiskey to help finance the new government which was going to assume the unpaid war debt of the individual states. The significance of this tax is that it is the first tax levied by the national government on a product that was made in America. This tax led to the Whiskey Rebellion. The first time that the famous estate tax was seen in the American system of taxation was in 1797. Although repealed and reenacted over the years, the estate tax that we know today was created in 1916 (www.investopedia.org). The early to mid 1800’s included several skirmishes with England and Mexico among other countries. The government during this time relied solely on the tariff as their source of funding. The American Civil War brought rise to two vastly different systems of taxation levied on the citizens of the United States and the Confederate States. Unlike the United States which had an established Treasury, the Confederacy did not have this and suffered. Inflation was a problem and the south relied on very low tax rates to garner funding for their war effort. In the south the population was lower than in the North and this led to a low response for War bonds that were sold. The Union implemented a system that relied on the foundations of what Alexander Hamilton tried to do in the later 1700’s to repay debts from the Revolutionary War. With the departure of Southern democrats who sought to lower taxes, the Northern republicans who now had power raised tax rates. Tax historians tell us that the rise in
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