Tax Return

In 1799, the British Parliament passed the first income tax act under Prime Minister William Pitt the Younger. The tax was introduced as a wartime measure to fund the conflict against Napoleonic France.¹ The act required individuals to file a declaration of their income, creating the earliest form of the modern tax return.

Pitt set the tax at two shillings per pound on incomes above sixty pounds per year, a rate of ten percent.¹ The tax was repealed in 1802 after the Treaty of Amiens but reintroduced in 1803 when war resumed.

The United States introduced its first income tax during the Civil War. The Revenue Act of 1861, signed by Abraham Lincoln, imposed a flat three percent tax on incomes above eight hundred dollars.² It was repealed after the war. The modern permanent income tax in the United States dates to the Sixteenth Amendment, ratified in 1913.³

The first Form 1040 was a single page. It asked for gross income, deductions, and net income, and required a signature under penalty of perjury.³

1913, The year the Sixteenth Amendment made the U.S. income tax permanent.

As income tax systems expanded, the annual return became a universal obligation linking individual citizens to the administrative apparatus of the state. What began as a wartime emergency became a permanent feature of citizenship in nearly every industrialized country.

The complexity of the tax return grew steadily. By the twenty-first century, the U.S. tax code exceeded 70,000 pages, and the Internal Revenue Service processed more than 150 million individual returns annually.⁴

In many countries, governments pre-fill tax returns using employer-reported data, a practice common in Scandinavia and parts of Europe. In the United States, the return remains primarily the responsibility of the individual taxpayer, a system that generates a multi-billion-dollar tax preparation industry.⁴

Timeline

• 1799, Britain enacts the first income tax act to fund the war against Napoleon.
• 1861, United States introduces its first income tax during the Civil War.
• 1913, Sixteenth Amendment makes the U.S. income tax permanent; first Form 1040 issued.

Endnotes

1. Martin Daunton, Trusting Leviathan: The Politics of Taxation in Britain, 1799-1914 (Cambridge: Cambridge University Press, 2001).
2. Revenue Act of 1861, 37th U.S. Congress, Sess. 1, Ch. 45.
3. U.S. Constitution, Amendment XVI, ratified February 3, 1913.
4. Internal Revenue Service, Data Book, annual publication, U.S. Department of the Treasury.