1 - A brief history of early Anglo-American corporate income taxation  pp. 19-46

A brief history of early Anglo-American corporate income taxation

By Steven A. Bank

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Both the United Kingdom and the United States first used an income tax during the nineteenth century, with the UK’s adoption of such a tax occurring just before the turn of the century. Eventually, this development forced the two nations to face the question of how to deal with the nascent corporate entity in the context of their early forays into income taxation. Although they relied on different methods, they were substantially aligned in approach. Thus, during the nineteenth century, the UK and the USA can be characterized as having an integrated corporate and individual income tax system.


The income tax was first adopted in the United Kingdom in 1799, during the Napoleonic Wars, under the leadership of the long-serving Prime Minister, William Pitt the Younger. Faced with the need for more revenue to wage the fight against France, Parliament had adopted what was called the “Triple Assessment” the year before as a form of quasi-income tax. Under this law, duties were imposed based upon the amount of assessed taxes the individual had paid the prior year on items such as carriages, horses, and other forms of property, with an exemption for those individuals having incomes below £60 a year. Because of its lack of success in raising the necessary funds, the Triple Assessment was abandoned after only a year. Its successor, the income tax (adopted in 1799), was imposed at a 10 percent rate on incomes of £200 and up with exemptions similar to those in place under the Triple Assessment and a graduated rate on incomes between £60 and £200.

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