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The History of Federal Taxes

Time Frame

From the founding of the United States until 1913, the federal government's main sources of tax revenue were custom duties on imports and excise taxes (taxes on a specific product or activity). When the 16th Amendment created the current income tax system in 1913, income taxes quickly became the government's most important source of revenue.


In July 1794, Pennsylvania whiskey producers rebelled against the government's tax on alcohol and started violent confrontations with federal officials, burning a tax collector's house to the ground. After further violence, President George Washington sent in federal troops and the rebellion was defeated by the end of November 1794.


Although the amount of taxes the federal government collects has generally increased over the country's history, from time to time Congress has enacted tax cuts, usually in periods of economic prosperity. Four tax reduction acts passed Congress in the 1920s, and major tax cuts also occurred in 1964, 1981 and 2001.

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