Most Active Stories Thu March 22, 2012 From Abe Lincoln To
Donald Duck: History Of The Income Tax The story of how the U.S.
wound up with the income tax is the story of two wars, a Supreme
Court justice on his death bed, and Donald Duck. It's also the
story of how the government overcame three obstacles. Obstacle
No. 1: Logistics How do you make sure people pay? Before the
Civil War, the government received most of it revenue through
tariffs — taxing goods as they came into the ports. This had its
limits, though. "Tariff duties are a great way to raise money as
long as [you're] not fighting a war," says Joe Thorndike, co-
author of the book War and Taxes. In the 19th century, war meant
blockaded ports, sunk ships — and almost no revenue from
tariffs. So during the Civil War, Congress decided it had to try
an income tax. It devised a really clever plan to get people to
pay. It made the tax returns public. "Your neighbor would see
you driving around on a brand new plow and he'd say, 'Wait a
minute,' " Thorndike