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Taxation

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The National Bureau of Economic Research has concluded that the combined federal, state, and local government average marginal tax rate for most workers to be about 40% of income.[1][2] The Tax Foundation concluded that government at all levels will collect 30.8% of the nation's income for 2008.[3]

The first federal statutes imposing the legal obligation to pay a federal income tax were adopted by Congress in 1861 and 1862 to pay for the Civil War. The 1862 law levied a 3% tax on incomes above $800, rising to 5% for incomes above $10,000. Rates were raised in 1864. This income tax was repealed in 1872, but a new income tax statute was enacted as part of the Wilson-Gorman Tariff Act in 1894.[4]

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