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Speaker 1: This Day in History Class as a production of I

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Speaker 1: Heart Radio. Hello and welcome to This Day in History Class,

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Speaker 1: a show that tally's the cost of history one day

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Speaker 1: at a time. I'm Gabe Lousier, and today we're looking

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Speaker 1: at the surprisingly recent birth of everyone's favorite civic duty

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Speaker 1: paying income tax. The day was January nine, seventeen. British

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Speaker 1: Prime Minister William Pitt the Younger introduced the nation's first

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Speaker 1: income tax. The widely unpopular measure was intended to help

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Speaker 1: finance the ongoing and incredibly expensive wars against Napoleonic France.

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Speaker 1: By the late seventeen nineties, things were looking grim for Britain,

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Speaker 1: both strategically and financially. A French invasion from across the

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Speaker 1: Channel seemed more likely by the day. There was growing

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Speaker 1: concern that Britain didn't have the money needed to mount

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Speaker 1: an effective defense. The UK Parliament was already collecting plenty

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Speaker 1: of taxes, including ones on property, horses, windows, wallpaper, bricks, wool,

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Speaker 1: and even hats. The country had always stopped short of

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Speaker 1: directly taxing the wealth of its citizens, but desperate times

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Speaker 1: called for desperate measures. Prime Minister Pitt announced this new

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Speaker 1: income tax in seventeen, and it came into force on

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Speaker 1: January ninth the following year. Faced with considerable public backlash,

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Speaker 1: pit stressed at every turn that the tax would only

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Speaker 1: be temporary. William Pitt had served as Prime Minister since

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Speaker 1: seventeen eighty three and spent much of that time trying

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Speaker 1: to restructure Britain's failing fiscal policy. His ideas were largely

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Speaker 1: based on the principles of Scottish economist Adam Smith, and

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Speaker 1: centered on the introduction of a new series of taxes

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Speaker 1: aimed primarily at the wealthy. These included taxes on large estates,

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Speaker 1: as well as on the carriages, horses, and servants used

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Speaker 1: to run them. And while taxpayers weren't fans of Pits

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Speaker 1: approach to financial reform, there was no arguing with the results.

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Speaker 1: His approach boosted annual government revenue from just under thirteen

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Speaker 1: million pounds in seventeen eighty three to nearly nineteen million

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Speaker 1: pounds in seventeen ninety two. However, one year later, Britain

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Speaker 1: went to war with revolutionary France, and that six million

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Speaker 1: pound gained from new taxes suddenly didn't seem like much.

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Speaker 1: The government responded with increases to indirect taxes and with

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Speaker 1: the addition of a new inheritance tax, but it still

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Speaker 1: wasn't enough. By seventeen ninety eight, a French invasion seemed imminent,

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Speaker 1: and without a major cash infusion, the British Army and

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Speaker 1: navy were likely to be overwhelmed. It was in that

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Speaker 1: desperate climate that financial expert Henry Beeke proposed a tax

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Speaker 1: on income as a last ditch way to raise money.

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Speaker 1: Prime Minister pit like the idea and added it to

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Speaker 1: the budget of December se as a temporary measure to

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Speaker 1: aid quote the prosecution of the war. The tax would

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Speaker 1: apply to all of Great Britain, but not to Ireland,

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Speaker 1: and was estimated to raise ten million pounds each year.

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Speaker 1: The new tax was levied at a progressive rate depending

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Speaker 1: on income. Those who made less than sixty pounds per

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Speaker 1: year weren't taxed at all, while those who made between

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Speaker 1: sixty and two hundred pounds were taxed at one percent,

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Speaker 1: and those who earned more than two hundred pounds were

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Speaker 1: taxed at ten percent. When the tax first went into effect,

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Speaker 1: many merchants and manufacturers evaded it, believing it to be unjust. However,

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Speaker 1: as the war dragged on, income tax was gradually accepted

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Speaker 1: as a necessity, and paying it became a kind of

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Speaker 1: patriotic duty. That said, Pitt and his tax were still

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Speaker 1: widely criticized. That's partly because the tax had brought in

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Speaker 1: far less money than expected, only slightly more than six

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Speaker 1: million pounds in seventeen ninety nine. But popular or not,

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Speaker 1: the tax revenue helped keep Britain afloat until its eventual

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Speaker 1: peace treaty with France in eighteen o two. By that point,

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Speaker 1: William Pitt the Younger had resigned as Prime Minister, and

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Speaker 1: his successor, Henry Addington, was openly denouncing the policy of

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Speaker 1: income tax. The unpopular measure was repealed shortly after the

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Speaker 1: treaty with Napoleon was signed, but when war broke out

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Speaker 1: with France again the following year, Addington quickly went back

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Speaker 1: on his word and reinstated income tax. It continued to

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Speaker 1: be collected for the remainder of the Napoleonic Wars, but

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Speaker 1: was abolished again in eighteen sixteen, one year after Napoleon's

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Speaker 1: defeat at Waterloo. It's probably no surprise, but that wasn't

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Speaker 1: actually the end of income tax in Great Britain. A

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Speaker 1: few decades later, it was revived again for another war,

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Speaker 1: that time with CRIMEA, and by the eighteen sixties, income

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Speaker 1: tax was an unhappy but unavoidable fact of life. Worse yet,

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Speaker 1: the idea of it proved contagious. Countries around the world

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Speaker 1: followed Britain's lead by introducing their own forms of income tax.

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Speaker 1: Some even adopted it for the same reason as Britain,

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Speaker 1: to offset the expense of costly wars. That was the

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Speaker 1: case in the United States, where income tax was introduced

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Speaker 1: in eighteen sixty one as a way to pay for

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Speaker 1: the impending Civil War. You probably didn't need yet another

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Speaker 1: reason to dislike war, but just in case, there you go.

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Speaker 1: I'm gay Bluesier and hopefully you now know a little

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Speaker 1: more about history today than you did yesterday. You can

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Speaker 1: learn even more about history by following us on Twitter, Facebook,

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Speaker 1: and Instagram at t d i HC Show, and if

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Speaker 1: you have any comments or suggestions, you can always send

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Speaker 1: them my way at this day at iHeart media dot com.

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Speaker 1: Thanks to Chandler May's for producing the show, and thanks

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Speaker 1: to you for listening. I'll see you back here again

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Speaker 1: tomorrow for another Day in History. Class m