Income Tax

Real World Example

During the Civil War, the U.S. government needed more money to fund the war efforts, so they introduced the first federal income tax in 1861. This tax was important because it helped the government collect necessary funds quickly and fairly from those who could afford to pay. The income tax responded to the problem of war expenses, which couldn't be covered by existing tariffs and sales taxes alone. Today, income tax is still important because it funds essential services like schools, roads, and emergency services. For example, when your parents or guardians pay income tax, that money helps maintain the local library you visit or the public school you attend.