AC 431 Lecture Notes - Lecture 1: Tax Rate, Franchise Tax, Proportional Tax
Document Summary
Federal government relied predominantly on customs duties and excise taxes to finance its operations. First federal income tax on individuals enacted in 1861 to finance the civil war but was repealed after the war. Federal income tax reinstated in 1894, but different states had to pay different taxes. Amendment to the constitution was made in 1913 to permit the passage of a federal income tax. Revenue act of 1913 imposed a 1% tax on corporations net income. Individual rate varied from 1-6% depending on the individuals income level: how the federal income tax is changed. When a change in tax law is deemed necessary by congress, the entire law is not changed, but specific provisions of the tax law are added, changed, or deleted on an incremental basis. Revenue sources: the largest source of federal revenues is individual income tax, other major revenue sources include social security (fica) taxes and corporate income taxes. Types of rate structures: tax base.
