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There are evidences of early civilizations using income tax. A ruler collects a portion of people's properties to finance in materials needed during financial crisis, help the needy and to increase the power and wealth of the rulers.

In the Middle East, rulers collected the money from taxation to pay for the cost needed in building public artifacts like monuments and temples. Some of the money was used to finance warfare. Taxation originated there and was spread around the world.

Taxation was only stopped during peaceful times. When another war came along, it was brought back again. Biblical accounts tell that people were expected to turn in 1/10 of their crops to the king to be spent on helping the poor people.

In England, an attempt was made in 1404 to collect real taxes based on the people's wages. However, the public refused the proposal and the method was repealed. Tax records were burned.

The first development of modern income tax occured on 1719 in England. This tax was used to finance warfare against France during the Napoleonic Wars. This helped Britain and its other European allies win in 1815. After the war, the people again demanded its repeal and so it was in 1816. The tax records were again burned for the second time.

Other European countries like Germany, the Netherlands, Sweden, Switzerland and others adopted the method and thus it was spread.

In the U.S., a direct tax was placed on citizens after drafting the Constitution in 1787. The Supreme Court supported the government's first income tax during the Civil War in 1862.

The Union government found financial burdens for warfare, just by using taxes based on tariffs so the government used income tax for emergency reasons. It was then renewed in 1864 and was achieving a good rate since it imposed heavier tax burdens on people with a larger income than most. After the war,it was repealed in 1872.

However, the people demanded a fairer income tax in the late 19th century, saying that the existing forms of revenues-tariffs,exercise taxes(based on specific items like alcohol) and property taxes- were a burden to poor people.A fairer income tax would impose heavier taxes on wealthier people.

The U.S. Congress in 1894 imposed a 2% tax on all people having an income of over $4,000. Yet the Supreme Court ruled that the law was unconstitutional and did not bring income based on each state's population. This ended the older form of U.S. taxation.