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 This tax was repealed and replaced by another income tax
Working Tax Credit from the earlier benefit for working families known as Family Credit (FC), which had been in operation since 1986. The WFTC shared its assessment of means and period of renewal (6 months) with FC but moved towards a tax credit approach styled on schemes in other countries, which used an annual declaration of income to assess entitlement for a whole year. Tax credits also replaced the child elements in means tested benefits, the Children's Tax Credit in the tax system, and disabled persons tax credit. In 2014 WTC and CTC combined cost £30 billion per year. The basic operation of