This Day in Wall Street History 1862: The tax man cometh

On this day in 1862, the United States Congress gave the green light to the tax-centric "Revenue Act." The legislation, which was soon signed into law by President Abraham Lincoln, imposed a 3% tax on people with incomes between $600 to $10,000; and also called for a 5% levy on people with incomes reaching over $10,000.

However, the "Revenue Act" was perhaps more notable for creating the Bureau of Internal Revenue, a government agency that was charged with collecting the revenue generated by the new taxes.

Though the "Revenue Act" and its attendant package of taxes were allowed to lapse into legislative oblivion after the Civil War, the Bureau of Internal Revenue eventually came back to haunt America's taxpaying citizens in 1913, when the 16th Amendment was added to the Constitution.

Along with sanctioning the income tax, the amendment paved the path for the opening of the Internal Revenue Service, which, in its role as the official clearinghouse for the nation's taxes, proved to be the bureaucratic progeny of the Internal Revenue Service.

Source: History.com