Prior to the Civil War (1861–1865), America’s revenue needs were met primarily through tariffs, duties, and other consumption taxes. In 1861, however, Congress adopted an income tax aimed at the nation’s most affluent to finance the Civil War. The U.S. Supreme Court upheld the constitutionality of the income tax in Springer v. U.S. (1864). And in 1871, when the need for government revenue declined, Congress repealed the income tax, thereby placing the burden of financing government again almost entirely on tariffs and duties, increasing the cost of goods paid by workers. Thus, the repeal of the income tax shifted a portion of the tax burden away from the affluent to consumers generally.
Many Americans and populist politicians saw the tariff-based tax system as protecting capitalists by immunizing their products from competition from imports. Some also resented the wealthy, who were sometimes seen as shirking their responsibility to help pay for government services. Thus, the idea and appeal of an income tax—reducing tariffs and increasing the tax burden on the affluent—never fully retreated from the American political landscape. There was, in fact, constant political pressure on Congress to restore the income tax; Congress introduced more than sixty bills between 1871 and 1894 to restore the income tax, culminating in passage of an income tax as part of the Wilson-Gorman Tariff Act of 1894. Less than a year after its passage, however, the U.S. Supreme Court held that portions of the income tax levied by the Wilson-Gorman Tariff Act of 1894 were unconstitutional.