The Revenue Act of 1861, formally cited as Act of August 5, 1861, Chap. XLV, 12 Stat. 292, included the first U.S. Federal income tax statute (see Sec.49). The Act, motivated by the need to fund the Civil War, imposed an income tax to be "levied, collected, and paid, upon the annual income of every person residing in the United States, whether such income is derived from any kind of property, or from any profession, trade, employment, or vocation carried on in the United States or elsewhere, or from any other source whatever". The tax imposed was a flat tax, with a rate of 3% on incomes above $800. The Revenue Act of 1861 was signed into law by Abraham Lincoln. The income tax provision (Sections 49, 50 and 51) was repealed by the Revenue Act of 1862. (See Sec.89, which replaced the flat rate with a progressive scale of 3% on annual incomes beyond $600 (which was 3.4 times the 1862 nominal gross domestic product per capita of $177.69; the corresponding income in 2021 is $234K) and 5% on incomes above $10,000 (which is 56 times the 1862 nominal gross domestic product per capita; corresponding to $3.9M of income in 2021) or those living outside the U.S., and perhaps more significantly it was explicitly temporary, specifying termination of income tax in "the year eighteen hundred and sixty-six"). History Prior to the Civil War, the United States faced a financial depression subsequent to the Panic of 1857, an event facilitated by over-expansion of the domestic economy and a European financial meltdown. In the three years preceding the Civil War, the Federal Government incurred a budget deficit exceeding $40 million. Coupled with the threat of secession, the Federal deficit placed the US government under considerable financial strain. In 1860, the US Treasury paid between 8 and 12 percent interest on government bonds in order to raise additional funds and meet public expenditures. In December 1861, the US Treasury attempted to sell five millions of interest-bearing notes at 12 percent but found itself able to dispose of only four millions. The Treasury's struggles illustrate the precarious nature of the US government's financial state. As the nation edged closer to war, the need to mobilize a volunteer force placed an additional financial burden upon the Federal government. While treasury notes with enticing interest rates allowed the US government to raise revenue quickly, they