<P> The US federal government imposed the first personal income tax , on August 5 , 1861 , to help pay for its war effort in the American Civil War - ( 3 % of all incomes over US $800 ) ( equivalent to $21,800 in 2017 ) . This tax was repealed and replaced by another income tax in 1862 . It was only in 1894 that the first peacetime income tax was passed through the Wilson - Gorman tariff . The rate was 2 % on income over $4000 ( equivalent to $113,000 in 2017 ) , which meant fewer than 10 % of households would pay any . The purpose of the income tax was to make up for revenue that would be lost by tariff reductions . The US Supreme Court ruled the income tax unconstitutional , the 10th amendment forbidding any powers not expressed in the US Constitution , and there being no power to impose any other than a direct tax by apportionment . </P>
<P> The US federal government imposed the first personal income tax , on August 5 , 1861 , to help pay for its war effort in the American Civil War - ( 3 % of all incomes over US $800 ) ( equivalent to $21,800 in 2017 ) . This tax was repealed and replaced by another income tax in 1862 . It was only in 1894 that the first peacetime income tax was passed through the Wilson - Gorman tariff . The rate was 2 % on income over $4000 ( equivalent to $113,000 in 2017 ) , which meant fewer than 10 % of households would pay any . The purpose of the income tax was to make up for revenue that would be lost by tariff reductions . The US Supreme Court ruled the income tax unconstitutional , the 10th amendment forbidding any powers not expressed in the US Constitution , and there being no power to impose any other than a direct tax by apportionment . </P>
when did federal income tax came into being
when did federal income tax came into being
August 5 , 1861
August 5 , 1861