Architecture of US Taxation

The federal government before 1913 funded itself almost entirely through tariffs on imported goods and excise taxes on items like alcohol and tobacco. There was no permanent federal income tax. The government had experimented with one during the Civil War — the Revenue Act of 1861 imposed a flat…

The Internal Revenue Service is a bureau of the Department of the Treasury — not an independent agency — and is ultimately accountable to the Secretary of the Treasury and through them to Congress. Its institutional roots trace to the Revenue Act of 1862, when Abraham Lincoln appointed the first…

The most persistent misconception about US income taxes is the belief that earning more money can somehow reduce your take-home pay by pushing you into a higher bracket. The concern goes like this: "I'm at the top of the 22% bracket — if I earn one dollar more, I'll jump into the 24% bracket and…

Gross income is where every federal income tax calculation begins, and the law casts a deliberately wide net. The Internal Revenue Code's starting point is simple: all income from all sources is included unless Congress has specifically excluded it. Wages, salaries, tips, and bonuses are included…