In order to help pay for the war effort (that would be the American Civil War), the United States government levied the first-ever national income tax on the American people with the Revenue Act of 1861.
The Revenue Act of 1861 levied a three percent tax on all incomes over $800. This was the first such tax ever levied on the new country, although excise taxes had been levied on consumer items such as liquor and tobacco. The Revenue Act was rescinded eleven years later, in 1872. No further income tax was levied on the American people until forty-one years later. In October 1913, Congress passed a new income tax law that affected less than one percent of the population, with rates starting at one percent and going as high as seven percent for taxpayers with income higher than $500,000.

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