Before the 16th Amendment, US tax law required direct taxes to be directly apportioned to a state's population

The 16th Amendment paved the way for capital gains taxes

Ratified in 1913, the 16th Amendment paved the way for a far-reaching federal income tax and supercharged the country’s coffers. Before then, the US depended on import tariffs and so-called consumption taxes to raise revenue.

On July 1, 1862, the agency now known as the Internal Revenue Service was established and named the Bureau of Internal Revenue

It was created to collect the first-ever US income tax, which was created to help pay for the Civil War. After gaining their independence from Britain, Americans were skeptical about giving the federal government absolute power to collect federal income taxes. As a result, early US tax laws dictated that direct taxes, like income taxes, had to be directly apportioned to a state's population. The nation went back and forth on its federal tax laws multiple times. For instance, in 1872, the income tax from the Civil War was repealed. But it was revived in 1894, and then repealed again in 1895. In 1913, Congress passed the 16th Amendment, giving Congress the power to levy income taxes on individuals and corporations without apportioning the burden among the states in line with population, once and for all.

Individual income taxes are the federal government's primary revenue source, see a tracker that breaks down where the rest of the budget comes from

The US government historically makes nearly half of its total revenue last year from individual income taxes. But the US makes also makes money from a variety of other sources, including Medicare taxes and corporate income taxes. However, the federal government has run a deficit since 2001—reaching a peak of $3.13T in 2020.

How the federal income tax affected Prohibition

In the early 1900s, 30% to 40% of government tax revenue came from liquor, wine, and beer, a reliance that made Prohibition seem like a fiscal impossibility. But the passage of the federal income tax in 1913 changed the calculus, which helped allow the government to ban alcohol production and sales.

Death taxes are placed on a deceased person's estate

Death taxes can include liquid cash, property, stocks, or other financial assets they owned. There are two main types of death taxes in the US: the estate tax and inheritance tax. Death taxes are levied at the federal and state level, but are targeted towards the rich.

Why the rich don't pay taxes like you do

The system behind the US income tax isn't as straightforward as it looks. You earn money. Taxes get taken out. Case closed … right? Not exactly. In this episode of "1440 Explores," we break down how the US tax system actually works, from confusing deductions and misunderstood tax brackets to why the wealthiest Americans often end up paying a very different tax than everyone else.

Hawaii and New York have the highest tax burdens out of all US states, both exceeding 12% of income

The term "tax burden" in this case refers to property, income, sales, and excise taxes as a share of total personal income. Alaska and New Hampshire have the lowest total tax burdens in the US, both falling below 6%.

Read why some states are considering imposing a flat tax rate that isn't adjusted by income

Wisconsin was the first US state to impose a state income tax, close in time to when the federal income tax went into effect. Many states followed suit, but nine states to this day still don't levy wage-related taxes.

Understanding the low corporate tax rate in the US

Corporate taxes, which make up roughly a third of the federal government's revenue, have been calculated using a flat 21% rate since the Tax Cuts & Jobs Act of 2017. The current rate is considered low both by historic standards (it averaged over 50% in the 1950s and 1960s) and compared to other countries.

Most Americans take the standard tax deduction

A tax deductible is an expense that a taxpayer or business can subtract from adjusted gross income, reducing their taxable income and therefore reducing the amount of taxes owed. Governments often use tax deductibles as a way to reward people who do things that are considered beneficial to society, like charitable donations.

See comparisons of different countries' taxation strategies

Taxes are a major revenue source for most countries, and how each government taxes citizens often reflects the country's economy. Developed countries tax at much higher rates than developing ones, and as a country grows its GDP, it also typically grows the proportional percentage of taxes it gains from its citizens.

Learn how the US tax code works and why it's important

First published in 1926, the US Code is the official codification of federal statutes in the US. Title 26 of the US Code, for instance, lists all of the federal tax laws of the United States. A new edition is published every six years.

Calculate how much of your tax dollars go to each federal program based on your income, filing status, and number of children

Tax policy can have a direct impact on the national debt

Past presidents' changes to tax codes have inflated the deficit. An expert on the topic explains the interplay between policy and the national budget while debunking 10 tax-related myths in this podcast.

See how local, state, and federal governments divide the cost of public services

Federal, state, and local governments share responsibility for funding public services. Education, roads, and social programs are funded through a complicated mix of taxes and intergovernmental transfers.

Most pensions are subject to federal income taxes

Those taxes kick in once someone starts taking distributions from their pension. Whether a pension is subject to state income taxes depends on the state and other factors. Learn more about how pensions are taxed in this article.

States are constitutionally mandated to draw their own congressional districts

Under Article I, Section 4 of the US Constitution, state legislatures possess the authority to determine how congressional districts are drawn. However, Congress retains the power to alter these rules if it chooses to.

What are tariffs and how do they work?

Tariffs are taxes on imported goods paid by importing companies but typically passed on to consumers. They vary by country and product and, despite recent spikes, have historically accounted for less than 2% of federal revenue. Explore more with these data visualizations from USAFacts.

'No taxation without representation' was championed by British lawmaker William Pitt

British parliamentarian William Pitt laid out the argument supporting “no taxation without representation,” a major feature of the colonial debate around the Stamp Act in 1765. Arguing taxes are valid, Pitt acknowledged they aren’t if those taxed don’t have representation in the body that passes the tax laws.

The United States is one of only around two dozen countries with a fully federal system of government, in which power is divided between national and state governments.

US immigrants pay billions of dollars in taxes each year

While immigrants who are authorized workers pay taxes just like anyone else, even unauthorized workers file tax returns. These unauthorized workers use individual taxpayer identification numbers.

The Articles of Confederation were not a federal system

Ratified in 1781, the Articles of Confederation left the states sovereign and independent, denied the national government power to tax or regulate commerce, and forced Congress to act through the states—exposing the limits of confederation and paving the way for US federalism.

Voting rights expanded from 6% of Americans in 1789 to nearly all adult citizens today

In the first US election, only white male property owners—about 6% of the population—could vote. Constitutional amendments culminating in the 26th Amendment gradually expanded voting rights to nearly all citizens aged 18 and older.

McCulloch v. Maryland upheld implied powers and blocked states from taxing the federal government

In 1819, McCulloch v. Maryland confirmed that Congress may use implied powers under the necessary and proper clause and ruled that states cannot tax federal institutions, reaffirming the supremacy of the federal government within its constitutionally delegated powers.

Many states require higher direct wage amounts for tipped employees than the federal requirement

Employers of "tipped employees" are required to pay them $2.13 per hour in direct wages if that amount, combined with the tips, at least equals the federal minimum wage of $7.25. If the employee's tips combined with the employer's direct wages of at least $2.13 per hour do not equal the federal minimum hourly wage, the employer has to make up the difference. However, this differs from state to state. This interactive map shows what tipped workers make per hour in every state.

New England towns have practiced direct democracy since the 1700s

Town meetings in New England let residents vote directly on local budgets, laws, and policies. One of the oldest surviving forms of participatory democracy in the United States, the tradition dates back nearly 250 years.

If you miss the April 15 tax deadline, you could be subject to penalties

This does not apply if you file for an extension. Otherwise, you could face failure to file penalties no matter how late you file your taxes—whether it's April 16 or May 16. The penalty is 5% of the tax due for each month (or part of a month) that your return is late, minus any taxes paid on time and available credits. If you file more than 60 days late, you could owe a minimum penalty of either $525 or 100% of the unpaid tax—whichever is less.

The price of gas is a composite made up of several different factors, with the federal gas tax making up less than 20% of what drivers pay at the pump.

Despite being favored by 87% of Americans, Congress does not have term limits.

Trace how the Bill of Rights, inspired by centuries of political theory, took shape between 1774 and 1789.

Roughly 43 million US borrowers owe roughly $1.7T in student debt, the second-largest source of consumer debt behind mortgages.

See this overview of the firework rules across all 50 states, ranging from a complete ban on non-professional fireworks in Massachusetts to states with more lax rules like Indiana.

While the first exchange-traded fund (a 'basket' of different assets that can be bought and sold on a stock exchange) in the US only launched in 1993, the global ETF market has grown to more than $10T in the short time since.

Mark Twain spent decades feuding with the US Postal Service, convinced its costs and regulations were bureaucratic overreach.

Gerrymandering works through two techniques: cracking opposing voters across districts to dilute their power, and packing them into a few to waste their votes in lopsided majorities.

The American Society of Civil Engineers' infrastructure report card gave the US a C in 2025, its highest grade since the project launched in 1998.

Art theft is the third-largest source of criminal revenues worldwide, thanks in part to the subjective nature of valuing a work of art.

View the ten deadliest tornadoes in US history.

Some coin denominations have ridges etched on their sides, partly to prevent counterfeiting, in a practice called 'reeding.'

The story of Dollree Mapp, whose legal challenge over her 1957 conviction for possessing "obscene material" led to a major strengthening of the Fourth Amendment

Jimmy Carter signed a 1978 bill that legalized home brewing, a move credited with kick-starting the craft beer industry.

Hurricanes, which rely on air consistently spinning in the same direction, cannot cross the equator because air curves in opposite directions north and south of it.

The Beatles' US label rejected the band's first two singles, 'Please Please Me' and 'From Me to You,' with one executive calling the band 'dead in the water.'

Pure water does not conduct electricity because this flow of energy requires the movement of charged particles, and water is a neutral molecule.

At the beginning of the 20th century, a group of young men ate standard American food—replete with food additives like borax and formaldehyde—as part of government research to better understand food safety.

Poison ivy's rash-causing compound is found in the plant's roots, stem, and leaves—so coming into contact with any part of the plant can lead to rashes for the 85% of people who are allergic to it.

The concept of phantom limbs, the perception that amputated limbs are still present, dates back to a French military surgeon in the 16th century.

Corals are themselves not coral reefs—the term refers to the tiny marine invertebrates that build the rigid reef.

The 2026 Ebola outbreak is hampered by a lack of vaccine against the species of the virus, heightening the need for rapid tests to aid in disease control.