Income taxes are taxes governments levy on money earned by businesses and individuals. What’s more, they’re also many countries’ largest source of revenue: In the US, individual income taxes made up nearly half of the federal government’s revenue in 2024, while corporate income taxes added another 11% .
Hours of research by our editors, distilled into minutes of clarity.
The US first levied income taxes during the Civil War, but modern income taxes became an American fixture in 1913. Two years earlier, Congress passed the 16th Amendment to give the government the right to tax individuals’ and businesses’ income. The US still technically levies the same federal income tax now as it did then—though it’s evolved. Learn more about the history of income taxes here.
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. Learn why the United States Code matters with this explainer.
Americans have long resisted income taxes. So, how did they become permanent? This overview explains how wartime funding needs, constitutional changes, and economic shifts gave rise to the modern tax system, from the Civil War to the payroll withholding rules we follow today.
One of the Internal Revenue Service’s jobs is enforcing the Internal Revenue Code. The Internal Revenue Code is Title 26 of the US Code, which is the official codification of federal statutes in the US. Title 26, also known as the IRS code or IRS tax code, lists the federal tax laws of the United States. Learn more about the Internal Revenue Code here.
The US’s highest marginal income tax rate is 37%. That rate is compared to other countries’ both in a map and accompanying chart. Denmark has the highest rate at nearly 56%, while a handful of countries don’t use marginal taxes at all. In the Middle East, many countries count on oil and gas to finance their governments. See how the US stacks up with this data visualization.
In the 2020s, the top marginal tax rate has floated around 37%, relatively lower than previous eras. Some have called for boosting the rate significantly to tax the highest earners.
Before the 16th Amendment, US tax law required direct taxes (like income and property taxes) to be directly apportioned to a state's population. Due to these requirements, the federal government could not impose many direct taxes. But the 16th Amendment changed all that. To find out more about direct and indirect taxes, read this explainer.
The Internal Revenue Service has audited less than 1% of all individual tax returns. If you’re still worried about being audited, know that some people are more likely to be audited than others, such as people who make a lot of money and those who take large charitable deductions. To learn more, check out this list of 18 audit red flags.
This podcast episode takes a lighthearted dive into the history of the IRS, from when the agency was founded and called the Bureau of Internal Revenue, to that one time it had to enforce a national ban on alcohol. Want to learn more? Listen to the podcast episode.
The Commissioner of Internal Revenue was created in 1862 to take over federal tax collection after the President enacted a temporary income tax. That agency eventually became today’s Internal Revenue Service. This timeline highlights the IRS’s history, including the introduction of standard deductions and the digitization of the filing process. Brush up on the IRS’ history with this resource.
The United States is home to more than 33 million businesses, the vast majority of which are small businesses, with millions being created (and others closing shop) every year. These businesses often rely on loans, provide the goods and services that keep the economy flowing, and sometimes even grow large enough to enter public markets or provide private investment opportunities. Explore key topics central to business and finance, from the role of the Federal Reserve to how initial public offerings work, how millions of American students finance higher education, and more.