Evolution of Taxes in U.S

The taxation system of U.S has been subject to various changes in the past that were a response to the taxation scenario present in the country and all over the world. The things that have undergone changes many times are various kinds of taxes, the tax percentage, the extent of revenue generated and income coverage and many more. Although the role of U.S government has been quite important in framing the tax system, the various industries and the world economy have also contributed in this area a bit.

The Early History Phase: - At this time, the government was not in need of much revenues and as a result of this there were very few taxes. The federal government used to levy taxes on goods such as distilled spirits, tobacco, refined sugar and snuff. At that time the responsibility to collect tax was of the concerned state only. After the year 1780, the taxes were given a new name called direct taxes as they were paid directly to the Federal Government and the role of state government was that of a mere mediator only.

The Period Of 19th Century: - 19th century brought along with it the taxes on precious items such as gold, silverware and jewelry. It was in the year 1862, that the government introduced the term income tax in U.S. After this other taxes such as excise duty and sales tax were also introduced.

The Start Of 20Th Century: - In this era, government made the legal authority of tax collection to the individuals and various private companies. In this era, the tax on the wages was also introduced.

The Modern History: - In the year 1986, the tax reform act was signed by President Reagan. The tax rate on a person’s income was reduced from fifty percent to twenty eight percent at this time only. It was in the year 2001 that George Bush came into power and then he signed a series of tax cuts which were said to be part of the economic growth. In the year 2001, the income tax rates were about ten percent which were quite less. Two tax bills were signed in the year 2005 and 2006 and these were extended to the year 2010.

Now, it can be seen that tax system, the tax cuts and the entire tax scenario are more or less responsible for the present day economy of United States. The only one thing that the present government can do is perform a thorough research, understand the mistakes that have occurred in the past and foresee the effects of the changes that can be made in the future. If all this is done properly it can be of great benefit to the people of United States and undoubtedly for the government. The times have gone of making lucrative promises to the people as now people want realistic and practical solution that can help them come out of this critical situation.

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