What is the 'Revenue Act Of 1862'

The Revenue Act of 1862 was passed by Congress to fund the Union in the American Civil War and created the Bureau of Internal Revenue. The Act revised the original 1861 act which established a flat income tax, creating a progressive tax of 3 percent on incomes between $600 and $10,000 and a 5 percent tax on incomes over $10,000. The Act also created the Office of the Commissioner of Internal Revenue, and levied excise taxes on many luxury and "sin" items, from playing cards to alcohol. It also increased government coffers by an estimated $340 million during the 10-year period it existed.

BREAKING DOWN 'Revenue Act Of 1862'

The income tax rates of the Revenue Act of 1862 were later increased with the Revenue Act of 1864. The income tax was later repealed in 1872 and reintroduced in 2013 with ratification of the 16th Amendment. Excise taxes evolved to pertain primarily to alcohol and tobacco sales. The Bureau of Internal Revenue is known today as the Internal Revenue Service (IRS). The name was changed to emphasize a greater focus on serving the public rather than merely collecting taxes. According to the IRS Data Book, in 2017 the agency collected over $2 trillion in revenue and processed more than 224 million tax returns.

RELATED TERMS
  1. Jobs And Growth Tax Relief Reconciliation ...

    An act passed by congress that was intended to improve the economy ...
  2. Excise Tax

    An excise tax is an indirect tax charged by the government on ...
  3. Tax Reform Act Of 1986

    The Tax Reform Act of 1986 is a law passed by Congress that reduced ...
  4. Taxes

    An involuntary fee levied on corporations or individuals that ...
  5. Direct Tax

    A direct tax is a tax paid directly by an individual or organization. ...
  6. Securities Act Of 1933

    The Securities Act Of 1933 is a federal piece of legislation ...
Related Articles
  1. Taxes

    5 States Without Sales Tax

    Learn about the five states that do not charge sales taxes and about other taxes the states levy instead in order to generate revenue.
  2. Taxes

    How Tax Cuts Stimulate the Economy

    Learn the logic behind the belief that reducing government income benefits everyone.
  3. Retirement

    Income Taxes and Your Retirement Accounts

    Converting a traditional IRA or 401(k) to a Roth IRA may save you money on your taxes.
  4. Taxes

    What All the Candidates’ Tax Plans Are Missing

    The presidential candidates have starkly different tax-reform proposals – but none of them gets to the real problem of America's tax system.
  5. Taxes

    Which Countries Have the Highest Taxes on High Incomes?

    These countries charge the highest taxes on high incomes.
  6. Taxes

    Comparing Regressive, Proportional and Progressive Taxes

    Learn about the basic differences between three common tax systems.
  7. Taxes

    Parties For Taxes: Republicans Vs. Democrats

    Read about the political parties' differences in tax ideology, and how it can affect your paycheck.
  8. Taxes

    How the GOP Tax Bill Affects You

    Here's how the new tax bill changes the taxes you file in 2018.
  9. Financial Advisor

    How the Wealthy Can Benefit From Trump's Tax Proposals

    Donald Trump's tax plan likely means big tax cuts for the wealthiest Americans.
  10. Taxes

    Countries with the Highest Income Taxes

    Before you move to one of these countries with the highest income taxes, think through the overall tax situation - and what you get for your money.
RELATED FAQS
  1. What is the difference between a state income tax and a federal income tax?

    Learn the difference between state income tax and federal income tax based on tax rates, deductions, tax credits and taxable ... Read Answer >>
  2. What is the difference between revenue and sales?

    Revenue is the income a company generates before any expenses are taken out. Sales are the proceeds from the selling of goods ... Read Answer >>
  3. How are investment banks regulated in the United States?

    Read about the extensive regulations placed on investment banks in the United States, beginning with the Glass-Steagall Act ... Read Answer >>
Trading Center