Taxable Income, the Civil Service, and the Civil War

• In Event: Tax, History, and Historical Tax

Abstract

The first federal income tax system in the U.S. was part of raising revenue to fund the civil
war (April 12, 1861 - May 9, 1865). There is a rich history of writing about that first federal
income tax, particularly the challenges of describing the nascent idea of taxable income and
administrating and collecting it. We contribute to that history by including material from the
early rulings that illustrate the questions raised as taxpayers and tax assessors struggled to
identify the taxable object. These include questions about revenue, expense, and timing, as well
as whether losses from one business offset income in another, and which entity is responsible for
the tax. We also contribute by including material that describes the struggle to staff the assessor
and collector positions in the presence of a civil service still built on patronage. These struggles
include dangers to the collectors, governors who were unwilling to force action, and even
defending the motives of those recommending assessors and collectors.

Authors

• John T Rigsby, Mississippi State University

• Noel D Addy, Mississippi State University

• Xiaoyan Tony Chu, Nicholls State University