In the nineteenth and early twentieth centuries, the United
States relied primarily on taxes levied on products manufactured in
the United States (excise taxes) or imported into the country from
elsewhere (tariffs) for the bulk of federal revenues. Two notable
problems resulted from this heavy reliance on what are called
consumption taxes. First, the revenue from tariffs was easily
disrupted when trade fell. Second, both types of taxes were
typically passed on to consumers in the form of higher prices, and
this disproportionately impacted the poor. Both of these problems
with the consumption-based tax system led to consideration of an
income tax during the nineteenth century.
One hundred years ago life was short and brutal. The average American
only lived to age 35 back then, as was true in countries around the
world.
Antibiotics and modern medicine weren't even invented yet. There was no
Social Security, Medicare, Medicaid, and minimal national defense 100
years ago. A bunch of guys on horses constituted the American Army of
1910. Compare that to today's missiles and aircraft carriers. Life
today is quite different than a century ago. No one wants to go back to
those primitive times.
Well, perhaps it's incorrect to say "No one..."
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