Lincoln’s Law
The Revenue Act and the History of the Federal Income Tax
Even with the extended May deadline, we’re well past tax season, so why talk tax history now? As it turns out, it was in August way back in 1861 that the Revenue Act was passed, which imposed the first federal income tax. If you’re trying to recall your American history lessons, you may have already figured out that it was President Abraham Lincoln who signed this bill into law. A LOOK AT THE FIRST TAX The Revenue Act called for a 3% income tax on Americans making over $800 a year. That’s almost $26,000 in today’s dollars. The tax was levied primarily to fund the Civil War. While federal income tax dollars are spent in myriad ways today, defense remains a major category. About 16% of taxes collected for the 2019 tax year were spent on U.S. military and defense. CHANGES OVER TIME About a decade after the Revenue Act was passed, it was repealed. While it was possible to coax income taxes out of Americans during wartime, there was significant opposition to taxation following the end of the Civil War. It wasn’t until the 16th Amendment was ratified in 1913 that the federal government once again got the power to tax individuals on their income and to spend the money how government officials saw fit, rather than in proportion to state populations.
Since then, taxes have been used in three main ways: mandatory spending on programs like Social Security, Medicare, and veterans’ benefits; discretionary spending on defense, education, transportation, and health; and finally, interest on the national debt. As the old saying goes, two things are certain: death and taxes. However begrudging Americans are about paying taxes these days, income tax has become a given.
5 Tips for Your Next Affordable Getaway
3. TRAVEL IN A GROUP. If you travel with friends, your expenses become a lot more manageable. Let’s say you and a partner travel with two other couples — renting a swanky cabin at $200 a night will only cost around $33 per person. Plus, you will create some amazing memories together! 4. PLAN YOUR MEAL BUDGET AHEAD OF TIME. Looking forward to eating certain dishes? Find local menus and prices to ensure you don’t spend more than you planned. If you want an authentic and homestyle culinary experience, consider signing up for a peer-to-peer dining experience through Traveling Spoon or Bon Appetour, which is tax-free as well! 5. CONSIDER VOLUNTEERING FOR VACATION. Want to go on a self-discovery trip? Why not cut your expenses in half by volunteering? For example, Habitat for Humanity offers a nine-day Mexico trip for $1,200 with lodging, food, and activities included. You’ll get to build structures and create something permanent for the local community.
Are you excited to explore the world again? Or maybe you’ve just gotten back from your latest vacation! In either case, the economic challenges of the pandemic might require travelers to plan their trips a little smarter. Here are five tricks to do just that.
1. CONSIDER YOUR BUDGET WHILE CHOOSING YOUR DESTINATION. Any destination heavily impacted by tourists is going to be more expensive to visit. So, consider taking a tour through various French countryside towns instead of Paris! Not only could it be more culturally immersing, but it may even be more relaxing and less stressful than visiting a dense area.
2. SIGN UP FOR SCOTT’S CHEAP FLIGHTS.
One of the most important parts of booking an affordable vacation is booking it at the right time. Scott’s Cheap Flights will track all the cheapest flights at an airport of your choice — you’ll get over 50%–75% savings on highly rated airlines. This will get you stress-free travel for a much lower price!
Traveling on a dime is no sweat with the right tools. Best of luck, traveler!
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