Income tax in the United States or property "per se." What seemed to be a straightforward limitation on the power of the legislature based on the subject of the tax proved inexact and unclear when applied to an income tax, which can be arguably viewed either as a direct or an indirect tax. The first income tax suggested in the United States was during the War of 1812. The idea for the tax was based on the British Tax Act of 1798. The British tax law applied progressive rates to income. The British tax rates ranged from 0.833% on income starting at £60 to 10% on
Income tax in the United States insurance (Social Security) taxes in 2016. The table below also does not reflect changes, effective with 2013 law, which increased the average tax paid by the top 1% to the highest levels since 1979, at an effective rate of 33%, while most other taxpayers have remained near the lowest levels since 1979. Income tax is imposed as a tax rate times taxable income. Taxable income is defined as gross income less allowable deductions. Taxable income as determined for federal tax purposes may be modified for state tax purposes. The Internal Revenue Code states that "gross income means all income from