By: HISTORY.com Editors
Abraham Lincoln imposes first federal income tax
On August 5, 1861, President Lincoln imposes the first federal income tax by signing the Revenue Act. Strapped for cash with which to pursue the Civil War, Lincoln and Congress agreed to impose a 3 percent tax on annual incomes over $800.
As early as March 1861, Lincoln had begun to take stock of the federal government’s ability to wage war against the South. He sent letters to cabinet members Edward Bates, Gideon Welles and Salmon Chase requesting their opinions as to whether or not the president had the constitutional authority to “collect [such] duties.” According to documents housed and interpreted by the Library of Congress, Lincoln was particularly concerned about maintaining federal authority over collecting revenue from ports along the southeastern seaboard, which he worried, might fall under the control of the Confederacy.
The Revenue Act’s language was broadly written to define income as gain “derived from any kind of property, or from any professional trade, employment, or vocation carried on in the United States or elsewhere or from any source whatever.” According to the U.S. Treasury Department, the comparable minimum taxable income in 2003, after adjustments for inflation, would have been approximately $16,000.
Congress repealed Lincoln’s tax law in 1871, but in 1909 passed the 16th Amendment, which set in place the federal income-tax system used today. Congress ratified the 16th Amendment in 1913.
History Shorts: Why We Pay Income Taxes
Income tax is seen as a part of American life, but this wasn't always the case. Why did Uncle Sam start taking a slice out of citizens' pockets'
Also on This Day in History
Discover more of the major events, famous births, notable deaths and everything else history-making that happened on August 5th
Related
U.S. Presidents
243 videosMartial law is a temporary state of military rule during an emergency. Leaders have exploited martial law to suppress political opposition.
Both his biological mother and his stepmother helped set Abraham Lincoln on the pathway to the presidency.
Generations of Americans never saw any U.S. president on money.
About the author
HISTORY.com works with a wide range of writers and editors to create accurate and informative content. All articles are regularly reviewed and updated by the HISTORY.com team. Articles with the “HISTORY.com Editors” byline have been written or edited by the HISTORY.com editors, including Amanda Onion, Christian Zapata, Cristiana Lombardo and Adrienne Donica.
Fact Check
We strive for accuracy and fairness. But if you see something that doesn't look right, click here to contact us! HISTORY reviews and updates its content regularly to ensure it is complete and accurate.
Citation Information
- Article Title
- Abraham Lincoln imposes first federal income tax
- Author
- HISTORY.com Editors
- Website Name
- History
- Date Accessed
- October 21, 2026
- Publisher
- A&E Television Networks
- Last Updated
- May 28, 2025
- Original Published Date
- November 16, 2009