How Tariffs Were Used To Fund the United States Before The Imposition of the Permanent Income Tax in the Early 1900s
Overview
This paper examines the historical role of tariffs as the primary revenue source for the United States federal government before the introduction of the permanent income tax in 1913. The paper traces the evolution of tariff policy from the post-Revolutionary War period through the Civil War era, analyzing how tariffs, excise taxes, and land sales funded government operations while also serving protectionist functions for domestic industries.
What this research paper covers
- Introduction to tariffs as taxation on imports and their role in early U.S. revenue generation
- Historical timeline of tariff policy from 1775 through the Civil War, including the Whiskey Rebellion and major tariff acts
- Transition from tariff dependence to income and excise taxation during the Civil War period and establishment of the Internal Revenue Bureau
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How Tariffs Were Used To Fund the United States before The Imposition of the Permanent Income Tax in the Early 1900’s
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How Tariffs Were Used to Fund the United States Before the Imposition of the Permanent Income Tax in the Early 1900’s
Tariffs refer to taxes executed on products and services imported from other nations. In the 1990’s, the government used public land sales, excise taxes, and tariffs to generate revenue before income tax was imposed (Abraham, 1988). As a result, the congress was able to control the federal government with mostly tariffs because the government then had few roles and functions. The government mainly depended on custom duties before income tax was introduced in 1913. Periods such as the custom duties and rising excise tax era were identified before 1863 and after 1863 respectively.
The custom duties occurred before 1812. However, the tariff policy was not effective because it was primarily focused on raising revenue instead of imposing protection. As a result, debates, and controversies occurred regarding the internal revenue sources such as direct and excise taxes that caused the federalists to focus on wielding the power of taxing people in the constitution. Moreover, the independence war or revolutionary war that occurred in 1775 to 1778 left the U.S. with a huge debt that was supposed to be paid ("United States Participation in the General Agreement on Tariffs and Trade", 1961).