Tax rates for the republicans during the civil war

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tax rates for the Republicans during the Civil War became the basis of tax ideologies for the
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Republicans post Civil War. Instead of having to take out large loans, the United States raised 65 percent of its revenue through war bonds. In 1862, Congress passed the Legal Tender act which gave rise to the ‘greenbacks.’ ( ). With the passage of this act, Congress made it a requirement for all citizens, banks, and governments to accept this form of money as legal tender. The Legal Tender Act of 1862 was successful in holding off the inflation for the North and was soon followed by the passage of the Internal Revenue Act of 1862. These acts were successful in holding off inflation in the North because the Act placed excise taxes on just about everything that Americans used in daily life. Taxes were placed on sin and luxury items. These items included liquor, tobacco, playing cards, carriages, yachts, billiard tables, and jewelry. The Legal Tender Act taxed patent medicines and newspaper advertisements. The act also imposed taxes on licenses. This tax was placed on practically every profession or service except the clergy. The Act also instituted stamp taxes, value added taxes on manufactured goods and processed meats, inheritance taxes, taxes on the gross receipts of corporations, banks, and insurance companies. There was even a taxed placed on dividends or interest they paid to investors. To administer these excise taxes, along with the tariff system, the Internal Revenue Act also created a Bureau of Internal Revenue , whose first commissioner, George Boutwell, described it as "the largest Government department ever organized" ( ). Today’s modern tax system can trace its roots to the first few decades of the 20 th century. Although several attempts at an income tax in the late 1800’s were shot down, one by the Supreme Court, lawmakers did not stop trying to impose such a tax on the American people. In 1907 President Theodore Roosevelt in a message to Congress stated,
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“When our tax laws are revised the question of an income tax and an inheritance tax should receive the careful attention of our legislators. In my judgment both of these taxes should be part of our system of Federal taxation. I speak diffidently about the income tax because one scheme for an income tax was declared unconstitutional by the Supreme Court; while in addition it is a difficult tax to administer in its practical working, and great care would have to be exercised to see that it was not evaded by the very men whom it was most desirable to have taxed, for if so evaded it would, of course, be worse than no tax at all; as the least desirable of all taxes is the tax which bears heavily upon the honest as compared with the dishonest man. Nevertheless, a graduated income tax of the proper type would be a desirable feature of Federal taxation, and it is to be hoped that one may be devised which the Supreme Court will declare constitutional.” In 1913 the 16 th Amendment to Constitution of the United States was ratified by Congress and became law on February 3, 1913. The amendment states, “The Congress shall have power to lay
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