Income Tax

But one income tax has been imposed by the Federal Government, and it arose from the nece ities of the government incident to the Rebellion. August 5, 1861, Congre authorized a tax of three per cent. on all incomes over $800 per annum. In July, 1862, an act was pa ed taxing all incomes under $5,000 five per cent., with an exemption of $600 and house-rent actually paid. Incomes in exce of $5,000 and under $10,000 were taxed two and one-half per cent. additional, and incomes over $10,000 five per cent. additional witb no exemptions. Further taxes of five per cent. on incomes of Americans living abroad and of one and one-half per cent. on incomes from United States securities were laid, these expiring in 1865. In 1864 special tax of five per cent. was imposed on incomes above $600. A readjustment the same year imposed a five per cent. tax on incomes between $600 and $5,000; ten per cent. on incomes above $5,000. During President Cleveland’s second administration a bill was pa ed and received the Executive's signature imposing a tax upon all incomes above $4,000. This tax was fiercely resisted and the constitutionality of the law was tested before the Supreme Court, which after a protracted hearing decided adversely by a majority of one. A strong di enting opinion of the minority was submitted. 354