INTERNAL REVENUE. the moneys collected wader the internal revenue bu reau in the Treasury Department of the United States. The term includes most of the receipts from national taxes, ex cept customs duties; but as commonly re stricted it does not embrace receipts from the sale of public lands, patent fees, pos tal receipts, etc., which are really sources of internal 12venue. Taxes are appor tioned among the States only in propor tion to the population. The firs,t in. ternal revenue tax was by act of March 3, 1791, which provided for a tax on distilled spirits of domestic manufacture discriminating in favor of those pro duced from domestic materials, and against those produced from foreign ma terials. The enforcement of this act led to the Whisky Insurrection in 1791. In 1794 taxes were levied on carriages, retail selling of wines and foreign dis tilled liquors, on snuff, sugar and sales at auction. In 1797 taxes were laid on stamped vellum, parchment and paper. In 1798 the first direct tax of its kind, one of $2,000,000, was apportioned among the States, and it was proposed that it should be levied on dwelling-houses, slaves and land. The tax of 1791 was levied to establish the principle of na tional taxation; that of 1794 from fear of hostilities with England; that of 1798 because of the threatened war with France. On Jefferson's accession to the presidency, and on his recommendation, all internal taxes were repealed in 1802, and no others were authorized till 1813. Then the war with England necessitated an increased revenue and most of the old taxes were reimposed. These were to cease a year after the close of the war, for the maintenance of which they were levied; but they were afterward con tinued for a while for the payment of the national debt. In 1814 increased need of money led to an augmentation in the amount of these direct and other internal taxes, and to the first imposition of taxes on domestic manufactures other than sugar, snuff and spirits, such as iron, candles, hats, playing-cards, um brellas, beer, ale, harness, boots, plate, household furniture, gold and silver watches, etc. The return of peace brought the abolition of direct taxes, axcise duties and other internal taxes, and from 1818 to 1861 none of these were levied.
The Civil War forced a renewal of the internal revenue system, and in 1861 a direct tax of $20,000,000 was appor tioned among the States, though it was not collected till a year later. On July 1, 1862, an exhaustive internal revenue act was passed, levying taxes on all sorts and kinds of articles too numerous to mention, on trades, incomes, sales, manufactures, legacies, etc. The bill was ill-considered and needed frequent modifications. More than 25 acts on the same subject were passed within the next six years. A few industries were taxed out of existence, but all were more or less disturbed. However, enormous revenues were raised and the people sub mitted without opposition to the necessi ties of the case. Extensive reductions were made after the war had ceased by various acts in 1866, 1867 and 1868. Further reductions were made in 1872. By the Revenue Act approved June 13, 1898, special taxes were levied to meet the expenses of the war with Spain.
At the declaration of war against Gerniany, in 1917, the necessity arose of increasing the revenue to a vol ume hitherto unprecedented. Congress passed new measures and increased the taxation. under old laws. Among the new legislations was an income tax, an emergency revenue tax, and excess prof its taxes. From these and other sources there was received in 1918 the vast sum of $3,696,043,484 in internal reve-nue. This was further increased in 1919 to $3,840,230,994. These sums were derived chiefly from the income and profits tax, which in 1919 amounted to $2,600,783,902; the tax on distilled spirits and alcoholic beverages amount ing to $483,050,854; the tax on tobacco and tobacco manufacture amounting to $209,391,000; and the tax on public utili ties amounting to $237,839,572. The col lection of these taxes, especially those on excess profits and on luxuries, resulted in considerable dissatisfaction. It was charged that the excess profits tax was largely responsible for the high cost of food and other commodities, and plans were made by the financial committee in the House and the Senate to modify or abolish entirely certain of these objec tionable taxes in 1921.