Some claim the Civil War was over taxation. The only true tax levied prior to the War was an excise tax during the Washington administration that did not affect cotton, rice, tobacco, or most products grown and distributed by the hands of the enslaved in the southern states.

The tax was proposed by Alexander Hamilton, who also founded the national bank; and would be used to match the loans issued by the very wealthy slave owning states in an attempt of the federal government to absorb the debts incurred by the original thirteen states following the American Revolution. This was done in order to establish a line of credit with other nations so that the United States could sell raw goods. Hamilton’s bank would fail, and so would the excise tax, and would be replaced by tariffs on the import of goods.

In the years just prior to the opening of the Civil War, the United States garnered 95% of its revenue from tariffs. According to the Annual Report of the State of New York for 1859-1860 , the Port of New York alone had an evaluation of $233.7 million, with a taxable value of $203.4 million. At that same time, the taxable value of all other American ports combined was only $76.5 million. During the War itself, the Federal government would pass the first income tax in American history in 1862, but most other money collected was from the sale of war bonds.

-Jonathan McCarty, Historical Interpreter