new internal taxes levied in the North, beginning with the first federal income tax in American history enacted on August 5, 1861. This revolutionary measure grew from a need to assure the financial community that sufficient revenue would be raised to pay interest on bonds. The Republican architects of the 1861 income tax made it modestly progressive by imposing the 3 percent tax on annual incomes over $800 only, thereby exempting most wage-earners.
