Taxes – US Government For Kids
From studying history, we have learned that taxes and taxing people was a common practice in Biblical times and feudal times in almost every country in the world.
Citizens of a country were divided into social classes, usually based on wealth, profession, occupation and race.
For example, landlords ruled over farmers and demanded some of what was produced. In turn, the landlords had to pay taxes to the king or ruler of the county or country.
If a person was born in a certain class, his future generations stayed in that class. It was a very rare thing for a person to move up to another class.
In some countries, even today, this class system exists. The intermingling of classes is seen as a crime and violators are punished by ostracism or sometimes by death.
America’s First Citizens
The early colonists of North America dealt with the British government or the French government, depending on which country claimed ownership of the land that was occupied by that country at the time.
This was a ‘head tax’, a real estate tax, and a tea tax (which actually wasn’t really a tax on tea).
However, as a government was formed, different laws were enacted.
The U.S. Constitution gave Congress the power to tax individuals. After the American Civil War, the first income tax law was enacted.
The U.S. Revolutionary War (1763 – 1787)
After the U.S. Revolutionary War, the U.S. Constitution gave Congress the right to impose taxes on U.S. citizens regardless of in which state they resided.
The state governments collected the taxes and submitted them to the Federal Government. Most of the taxes were excise taxes which are taxes on goods.
The Federal Government attempted to tax other things that the citizens owned but that didn’t last long.
The U.S. Civil War (1861 – 1865)
After the U.S. Civil War, the first income tax laws were enacted and the first Office of the Commissioner of Internal Revenue (now called the Internal Revenue Service or IRS) was established.
The office collected excise taxes from each state on goods like alcohol, tobacco, gunpowder, and tea.
Later, in 1797, the first estate tax was enacted to operate and build the U.S. Navy, and whatever funds were needed over the years in a time of war.
The estate tax was a tax on property that individual citizens owned.
Other forms of taxation followed over the years, such as federal and state income tax, sales taxes, the Social Security taxes which were enacted during the Great Depression of the 1930s and prior to WWII.
Other taxes were the Death Tax, Inheritance Tax, and taxes on U.S. citizens living outside the United States.
What are Modern Taxes Used For?
State and federal taxes are used for a multitude of services that are provided to ensure all American citizens live and enjoy an above-average standard of living.
Some of the taxes are used to install and maintain infrastructure (roads, utilities, transportation, health care facilities).
The various levels of government spend tax income on unemployment insurance and the costs of running the levels of governments (federal, state, municipalities, cities).
They also take tax money and use it to fund research and to operate hospitals and schools as well as other social programs including health and safety and food inspection.
Other services include the military and border services, public safety, police and fire departments, emergency programs, parks, and much more.
Quiz Time!
QUESTIONS
How long has taxation been practiced in the world?
How were people divided into social classes in Biblical and feudal times?
Did early colonists pay tax and to whom?
When was the first U.S. Income Tax law enacted?
Name five things that the levels of government spend modern taxes on.
ANSWERS
Taxing people was a common practice in Biblical times and feudal times in almost every country in the world.
People in Biblical and feudal times were divided into social classes according to their wealth, profession, occupation, and race.
Early colonists paid a head tax to whatever country claimed ownership of the land occupied.
After the U.S. Civil War ended in 1865, the first American income tax laws were enacted.
Modern taxes in the U.S. are spent on running the levels of government, funding research, hospitals and schools, the military, police and fire departments, and much more.
