The land tax shortly fell apart, and an income tax was proposed to the floor of the House of Representatives, enclosing "a tax of three percent on all incomes over $600 a year" (68). The Senate passed a bill asking for a five percent tax on all income over $1000 a year on the same day. The Conference Committee came up with a three percent tax on annual incomes over $800 and the first income tax was born (68). The tax was not progressive, and it was also not implemented. By 1862, the tax was altered by setting progressive rates "at three percent on incomes between $600 and $10,000; five percent between $10,000 and $50,000; and 7.5 percent over $50,000" (68). The progressive rates were not, however, set for "redistributing income from higher to lower income classes" or to distribute taxes "across the population in such a way as to cause the least hardship (Davies 21, 77). The progressive rates were set simply to raise more income (Witte 69). Slocum 3 The income tax, along with other efforts to raise revenue in wartime, were repealed almost immediately after Lee's surrender at Appomattox Court House. The cries for income tax repeal came strongest from the Northeast, who as a region paid a much higher percentage into the tax than other parts of the country. The progressive structure was dropped for a flat tax in 1867, and the entire tax was repealed in 1872. Although disliked by Northeastern states and California, who voted 61-14 as a group in favor of repeal, the income tax, according to Randolph Paul, "produced needed revenue at a critical period of American history when other revenue-raising methods would have probably failed" (29). Paul also points out that tax revenue accounted for 25 percent of government expenditures in 1864 and 1865, compared to only ten percent in 1862, the first full year of the income tax (29). For more than twenty years, Congress turned to tariffs and excise taxes to again be the primary sources of government revenues.
