Legal history of income tax in the United States adopted an income tax modeled on the tax instituted in England. The British theory was that you tax the income from property, and not the property itself; thus, sales of property were not subject to taxation. In order to help pay for its war effort in the American Civil War, the United States government imposed its first personal income tax, on August 5, 1861, as part of the Revenue Act of 1861. Tax rates were 3% on income exceeding $600 and less than $10,000, and 5% on income exceeding $10,000. This tax was repealed and replaced by another income tax
Income tax in the United States applies to net investment income in excess of certain thresholds. An individual pays tax at a given bracket only for each dollar within that tax bracket's range. The top marginal rate does not apply in certain years to certain types of income. Significantly lower rates apply after 2003 to capital gains and qualifying dividends (see below). Income tax for year 2017: Single taxpayer making $40,000 gross income, no children, under 65 and not blind, taking standard deduction; Note, however, that taxpayers with taxable income of less than $100,000 must use IRS provided tax tables. Under that table for 2016, the