Income tax in the United States peacetime income tax. The rate was 2% on income over $4000, which meant fewer than 10% of households would pay any. The purpose of the income tax was to make up for revenue that would be lost by tariff reductions. In 1895 the United States Supreme Court, in its ruling in "Pollock v. Farmers' Loan & Trust Co.," held a tax based on receipts from the use of property to be unconstitutional. The Court held that taxes on rents from real estate, on interest income from personal property and other income from personal property (which includes dividend income) were treated
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