Whatever you think of the Washington Times, they run a great “Civil War” page each week. This week, the subject was Abraham Lincoln and his personal finances. Lincoln was evidently a pretty good saver (despite his wife’s alleged extravagant spending), because at his death, Lincoln’s estate was valued at over $80,000 (and a total of about $110,000 was distributed to Lincoln’s widow and two surviving sons a couple of years later).
The topic of taxes also came up in this article. Evidently, an income tax was levied to help fund the Civil War. It is possible that this same tax was declared unconstitutional, which is why we have the 16th Amendment instead. The passage from the article is quite interesting:
To help fund the war, Congress passed legislation that pegged interest rates on bonds at 6 percent. Treasury notes, which paid 7.3 percent, were referred to as seven-thirties. In addition, Congress passed the Revenue Act, imposing the first income tax, then called an "income duty," on Americans.
As of Sept. 1, 1862, income became taxable at the rate of 3 percent for amounts greater than $600 and up to $10,000, 5 percent for income greater than $10,000, 1½ percent for interest income, and 5 percent for all property of any kind. In June 1864, the rate of tax for income greater than $600 increased to 5 percent. The pro-tax New York Herald had this to say on Sept. 1, 1862, the day the national tax began:
"To-day begins a new era of this country. Beyond a few local and state taxes, which were felt by none but owners of real estate, this country has never been taxed before. We have jogged along quietly and comfortably, and have amused ourselves greatly by laughing at the over taxed people of England, where a man is taxed from the cradle to the grave; where light, heat and water are taxed, and where not only
every rich man, but even the poorest peasant, is obliged to pay largely for the
privilege of existence and the blessings of bad government. ...
"We could have wished, however, that this necessary tax should be more equally
imposed than at present, and that the Eastern manufacturers and the Western farmers had been compelled to bear an equal share of the burden with the people
of the other States, instead of being almost entirely exempt, and leaving the
commercial people of the Middle States to pay an unfair proportion of the debt.
...
"The effect of the tax will be to deepen public sentiment. The people will be less ready to excuse the mistakes of our government and our generals. ... The war will be better conducted, for every man, having to pay his money towards carrying on the war, will insist and assist that it shall be properly prosecuted and speedily and gloriously concluded."
Years later, when it was determined that the tax did not apply to the president or
Supreme Court justices, Lincoln's executor filed a claim that resulted in a $3,555.94 refund check paid in 1872 to Lincoln's heirs.
Of course, this was before the days of widespread government dependency. Still, it is interesting to note how some issues do not change over time. And what’s this about the President being exempted from the income tax?
