'The govt was very small and existed mostly off of tariffs and duties. '
Did the founding fathers charge more taxes from the rich, than they did from the poor? Does anybody know? Was it FAIR and EQUAL then? Or has this "earn more, pay more" policy been there for 100% of American history?
Lincoln was the first to enact a National Income Tax in order to pay for the Civil War to raise and sustain an Army.
Lincoln signed the Revenue Act of 1861 This created a flat tax of 3% on incomes above $800 ($19,307 in current dollars), which was later changed by the Revenue Act of 1862 to a progressive rate structure.
The Revenue Act of 1862 (July 1, 1862, Ch. 119, 12 Stat. 432), was passed by the United States Congress to help fund the American Civil War.
The Act was signed into law by President Abraham Lincoln, introducing the first progressive rate income tax to the country.The office of the Commissioner of Internal Revenue was established,[1]
with the Act specifying that Federal income tax was a temporary measure that would terminate in "the year eighteen hundred and sixty-six").
Annual income of U.S. residents, to the extent it exceeded $600, was taxed at a 3% rate; those earning over $10,000 per year were taxed at a 5% rate.[2] With respect to the income tax liability generated by the salaries of "officers, or payments to persons in the civil, military, naval, or other employment or service of the United States, including senators and representatives and delegates in Congress", the law also imposed a duty on paymasters to deduct and withhold the income tax, and to send the withheld tax to the Commissioner of Internal Revenue.[3]
This Act repealed the flat rate income tax that had been established by the Revenue Act of the previous year.To assure timely collection, income tax was "withheld at the source" by the employer.