America Had No Income Tax Until 1913 🇺🇸💰 | How Did the Government Survive Without It? | Boring History for Sleep

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Hey there, history lovers. Tonight, a story that sounds made up, but is absolutely true. For the first 124 years of its existence, the United States ran without an income tax. No money vanishing from your paycheck, no dreaded April deadline, no IRS at the door. And somehow, on that set up, it built roads, fought wars, floated a navy, and stretched from one ocean to the other. So how did the most ambitious nation of the 1800s pay its bills without ever reaching into a working person's wallet? And what happened in 1913 that flipped the whole thing upside down forever? Tonight, we follow the money, from crowded harbour customs houses, to a whiskey rebellion, to one tiny amendment that changed everything. Before we set sail, drop a comment telling me where you're watching from and what time it is right now. Now dim the lights, get comfortable, and let's find out how a broke little republic funded an empire. Let's roll. Let's. So let's rewind to the very beginning, because the story doesn't start with a triumphant young country flexing its muscles. It starts with a nation that was, financially speaking, completely and utterly broke. Picture the scene in 1783 The Revolutionary War has just ended, the fighting is finally over, and against all odds the scrappy collection of former colonies has beaten the most powerful empire on the planet. This should be a moment of pure celebration. Fireworks, parades, everyone patting each other on the back, and there was some of that. But behind the fireworks, the people actually running the country were sweating through their waistcoats because the victorious new nation had won its freedom and immediately discovered it couldn't pay for so much as a decent dinner.

Winning the war was one thing. Paying the bill for it was a whole different nightmare. To understand just how deep the hole was, you have to remember how the war had been funded in the first place, which was, in a word, badly.

There had been no proper tax system to pay for eight long years of fighting. Instead, the revolutionaries had cobbled together money any way they could. They borrowed from France and the Netherlands and from wealthy patriots at home. They issued mountains of paper currency, the famous continental dollars, printing more and more of it as the war dragged on. They handed soldiers and suppliers IOS, essentially handwritten promises, to pay later, whenever later happened to arrive. It was the financial equivalent of holding a war together with tape and good intentions. And when the fighting stopped, all of those promises came due at once. And what a bill it was. Under the loose arrangement holding the states together at the time, known as the Articles of Confederation, the national government owed somewhere around $54 million. On top of that, the individual states had piled up roughly $25 million more in debts of their own. In the money of that era, these were staggering, almost incomprehensible sums, the kind of figures that made experienced men go pale. This was a young country that had bet everything on a revolution, and the credit card statement had just arrived. Naturally, there was no way to pay it. There had been one man who saw all of this coming and tried desperately to prevent it. His name was Robert Morris, a Philadelphia merchant so central to funding the revolution that he earned the nickname the financier of the revolution.

During the darkest days of the war, when the treasury was empty and the army was starving, Morris had pledged his own personal fortune and credit to keep the whole enterprise afloat, at one point essentially bankrolling major military operations on his own signature. He understood, better than almost anyone, that a country needed reliable income to survive. He pushed hard for the national government to be given the power to collect a small steady tax on imported goods, a modest fee that could actually start paying down the debt. It was a sensible, even obvious idea. And it failed, because under the rules of the time, that kind of change required the agreement of every single state, and all it took was one holdout to sink it.

Morris eventually threw up his hands and resigned in frustration, and years later, in a cruel twist, this financial genius who had propped up an entire war would end up in debtors' prison himself over bad land investments. The man who saved the nation's finances couldn't save his own. Here's where things get almost comical, in that grim way where you laugh so you don't cry.

The central government of the United States, the body theoretically in charge of this brand new nation, did not have the power to tax anyone. Not a farmer, not a merchant, not a single soul. Let that sink in for a second.