Legislation, Presidential & Congressional Politics/Lack of taxation before 1913

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Question
Hi! I read that before 1913 Americans didn't pay taxes. So how did USA fund the ARMY, MARINES, NAVY, schools, roads, hospital, infrastructure,etc...?

Answer
Americans did not pay income taxes.  They paid other taxes.  Most revenue came from import duties (called tariffs).  The other major source of revenue was excise taxes on the sale of alcohol and certain other items.  

Also the Federal government did not pay for schools, hospitals, most roads, or much of anything back then.  Hospitals were almost entirely private.  Schools and roads were built and run almost exclusively by State and local governments or privately.  Most States raised revenue through property taxes and to a lesser extent, estate taxes.

The federal government did pay for the military, but costs were very low compared to today.  During peace time, there were times during the early years of the republic that the total number of military personnel was less than 5000 people.  Opposition to standing armies was one of the reasons for the American Revolution, so this was for ideological, as well as economic reasons.

The federal government did not spend much money generally.  Consider that in the first 60 years of its existence the federal government spent an average of around $19 million per year.  In inflation adjusted dollars, that would be roughly $300 million per year, less than 0.0001% of what the Federal government spends today (even after adjusting for inflation).

I hope this helps!
- Mike

Legislation, Presidential & Congressional Politics

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Michael Troy

Expertise

I can answer just about any question about U.S. Political history, Constitutional law, the legislative process, elections, etc. I enjoy Presidential and Congressional historical trivia, but can answer more substantive questions too.

Experience

Former Staff member for a Congressman and Senator. I also worked on about 10 Congressional and Presidential campaigns (only one that won). For a short time, I worked in the legal department of the Federal Election Commission.    I have a B.A. in Political Science.

Organizations
Former LBJ Fellow (paid fellowship for Congressional Staff).
Pi Sigma Alpha (Political Science Honorary Society).

Publications
Washington Post
Washington Times

Education/Credentials
J.D. University of Michigan
B.A. George Washington University (Poli. Sci. major).

Awards and Honors
LBJ Fellow
Truman Scholar

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