During the War of 1812, the first attempt to tax American income was made. After more than two years of war, the federal government had an unbelievable $100 million in debt. To pay for this, the government doubled the rates of its main source of income, customs duties on imports. This made it harder for people to trade and brought in less money than the lower rates.
And to think that Boston's Tea Taxes were the cause of the Revolution!
During the war, goods and commodities had to pay excise taxes. Homes, slaves, and land were also taxed. After the war ended in 1816, these taxes were taken away and high customs duties were put in place to pay off the debt from the war.
What is income that is taxed?
The amount of your income that was used to figure out your tax. Gross income minus all adjustments, deductions, and exemptions equals taxable income.
Here are a few taxes:
Estate Taxes:
Taxing a person's property when they die is one of the oldest and most common ways to get money from them.
There are still Estate Taxes in the US, but there are plans to get rid of them.
This kind of tax can, among other things, be an estate tax (a tax levied on the estate before any transfers). An estate tax is a fee that is put on the whole estate of a person who has died, no matter how it is split up. An inheritance tax is a different kind of death tax (a tax levied on beneficiaries receiving property from the estate). Taxes on death give people a reason to move their assets before they die.
Canada no longer has Estate Taxes.
Most European countries have Estate Taxes. Great Britain is a good example because it has such high Estate Taxes that they have almost ruined the financial health of most of Britain's Nobility, who have been forced to sell off huge amounts of Real Estate over time.
. This kind of tax can, among other things, be an estate tax (a tax levied on the estate before any transfers). An estate tax is a fee that is put on the whole estate of a person who has died, no matter how it is split up. An inheritance tax is a different kind of death tax (a tax levied on individuals receiving property from the estate). Taxes on death give people a reason to move their assets before they die.
Capital Gains Taxes
Capital Gains are increases in the value of investments or real estate that make them worth more than what they were bought for. Until the asset is sold, the gain may not be realised or taxed.
Capital gains are usually taxed at a lower rate than regular income. This is done to encourage business and entrepreneurship, both when the economy is good and when it is bad.
