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43 Ne. J. Legal Stud. 1 (2023)

handle is hein.journals/neastjol43 and id is 1 raw text is: Page 1 / Vol. 43 / Art. 1 / North East Journal of Legal Studies THE HISTORY AND POWER OF TAXATION IN AMERICA by Bernadeth Prentice* I. INTRODUCTION There was a tremendous shift in the U.S. tax system from the 18th to the 19th century.1 Between 1870 and 1912, the U. S. had no income tax, but this changed between 1913 and 1946; two World Wars and the Great Depression, as well as the advent of wage and payroll taxation and the growth of estate and corporation taxes, all wreaked havoc on the economy.2 By 1947, the U.S. economy had entered a new era marked by higher taxation and government spending for the foreseeable future. The highest marginal income tax rate was 66% from 1947 to 2000, and government taxes averaged about 18% of Gross Domestic Product.3 In addition, high marginal tax rates were levied on estate and corporation income by the federal government, and state-level taxes increased dramatically above previous years.4 Conversely, the two World Wars and the Great Depression seemed to be the catalyst for the genesis of taxation on taxpayers' income. The content of this historical perspective focuses on understanding the United States Government power of taxation *JD, LLM, JSD; Lecturer of Accounting, Legal Studies & Taxation, Koppelman School of Business at Brooklyn College of the City University of New York