1862 – First Federal Income Tax

To fund the Civil War, Congress enacts the nation's first income tax law and creates the Office of the Commissioner of Internal Revenue. A person earning $600 to $10,000 per year pays tax at the rate of 3 percent. Those with annual incomes of more than $10,000 pay taxes at a higher rate. In 1866, internal revenue collections reach their highest point in the nation's 90-year history -- more than $310 million.

In 1872, Congress eliminates the federal income tax, only to revive it briefly in 1894. In 1895, the U.S. Supreme Court decides the income tax is unconstitutional because it is not apportioned among the states in conformity with the Constitution. (Library of Congress)