Trivia 8-17-16 Short Paycheck

[Trivia Master]

In 1862, why did Abraham Lincoln receive less in salary in October than he had received in September and by how many dollars?

credit: @MajGenl.Meade

 

[kholland]

In order to pay for the war, Congress passed legislation imposing a tax on income, to take effect the following September. When Mr. Lincoln received his September paycheck the next month, his net salary was $2022.33, $61 (3%) less than his previous paycheck.

http://www.civilwarstudies.org/trivia.shtm#26

 

[Brenal]

Collared by the IRS.
He had to pay $61 into the newly created Income Duty (Income Tax)

 

[truthckr]

Income tax was first collected under the general revenue act, ap|proved July 1, 1862. A tax was imposed upon the salaries of federal officials at the rate of three per cent on incomes in excess of $600, and the disbursing officers were required to withhold the "income duty," as it was called, at the time of the payment of the salary.

Some time was required to set up the machinery of collection, with the result that the first withdrawal of $61 from Lincoln's salary warrant was not made until September, 1862

Income tax and $61

 

[Copperhead-mi]

On Monday, October 6, 1862 Lincoln received his September salary warrant of $2,022.33, which was 3% or $61.00 less than his previous salary warrant due to the very first income tax deduction being taken from his pay.

Source: The Lincoln Log

 

[Reb]

Income tax $61.00

 

[Wallyfish]

The Revenue Act of 1862 was passed on July 1,1862 to help fund the war efforts. The tax rate was 3%. It took months to enact this tax. Therefore Lincoln's pay was reduced by $61 for this tax.

 

[JohnDLittlefield]

Income tax was first collected under the general revenue act, approved July 1, 1862. A tax was imposed upon the salaries of federal officials at the rate of three per cent on incomes in excess of $600, and the disbursing officers were required to withhold the "income duty," as it was called, at the time of the payment of the salary.

Some time was required to set up the machinery of collection, with the result that the first withdrawal of $61 from Lincoln's salary warrant was not made until September, 1862. Thereafter his warrant was reduced from $2,083.33 to $2,022.33 a month. The continuance of the war and the pressing need of more revenue led to the enactment of a new law on June 30, 1864. Under its provisions salaries of federal officials were taxed at five per cent on annual income above $600. Withholding $91.66 each month, the Treasury issued Lincoln's warrants in amounts of $1,981.67 from July 4, 1864 until the time of his death.
source: http://quod.lib.umich.edu/l/lincoln2/5250244.0001.001/1:17.4?rgn=div2;view=fulltext

 

[SD_CivilWarTvlr]

October of 1862 was the first month that the new federal income tax was withheld directly from his paycheck. His paycheck in September of 1862 was $2,083.33, in October it was reduced by $61 to $2,022.33.

 

[FarawayFriend]

He received $61 less because of the new Income Tax.

"Income tax was first collected under the general revenue act, approved July 1, 1862. A tax was imposed upon the salaries of federal officials at the rate of three per cent on incomes in excess of $600, and the disbursing officers were required to withhold the "income duty," as it was called, at the time of the payment of the salary.
Some time was required to set up the machinery of collection, with the result that the first withdrawal of $61 from Lincoln's salary warrant was not made until September, 1862. Thereafter his warrant was reduced from $2,083.33 to $2,022.33 a month. "

From: Personal finances of Abraham Lincoln / by Harry E. Pratt
http://quod.lib.umich.edu/l/lincoln2/5250244.0001.001/1:17.4?rgn=div2;view=fulltext

 

[Stony]

In order to pay for the war, Congress passed legislation imposing a tax on income, to take effect the following September. When Mr. Lincoln received his September paycheck the next month, his net salary was $2022.33, $61 (3%) less than his previous paycheck.
source-http://quod.lib.umich.edu/l/lincoln2/5250244.0001.001/1:17.4?rgn=div2;view=fulltext-page 126.

 

[MRB1863]

Income tax was first collected under the general revenue act, approved July 1, 1862. A tax was imposed upon the salaries of federal officials at the rate of three per cent on incomes in excess of $600, and the disbursing officers were required to withhold the "income duty," as it was called, at the time of the payment of the salary.

Some time was required to set up the machinery of collection, with the result that the first withdrawal of $61 from Lincoln's salary warrant was not made until September, 1862. Thereafter his warrant was reduced from $2,083.33 to $2,022.33 a month. The continuance of the war and the pressing need of more revenue led to the enactment of a new law on June 30, 1864. Under its provisions salaries of federal officials were taxed at five per cent on annual income above $600. Withholding $91.66 each month, the Treasury issued Lincoln's warrants in amounts of $1,981.67 from July 4, 1864 until the time of his death.

Source: http://quod.lib.umich.edu/l/lincoln2/5250244.0001.001/1:17.4?rgn=div2;view=fulltext

 

[Northern Light]

The amount of $61.00 was taken from his salary as Income Duty, or as we know it, Income Tax. Although as Predident he was not required to pay it, he chose to do so.
http://quod.lib.umich.edu/l/lincoln2/5250244.0001.001/1:17.4?rgn=div2;view=fulltext

 

[MaryDee]

The Revenue Act of 1862 imposed income tax withholding. According to http://quod.lib.umich.edu/l/lincoln2/5250244.0001.001/1:17.4?rgn=div2;view=fulltext,

"Income tax was first collected under the general revenue act, approved July 1, 1862. A tax was imposed upon the salaries of federal officials at the rate of three per cent on incomes in excess of $600, and the disbursing officers were required to withhold the "income duty," as it was called, at the time of the payment of the salary.

"Some time was required to set up the machinery of collection, with the result that the first withdrawal of $61 from Lincoln's salary warrant was not made until September, 1862. Thereafter his warrant was reduced from $2,083.33 to $2,022.33 a month."

Although I can't find a specific source, presumably Lincoln's salary for September would have been paid at the beginning of October, standard accounting practice. I note that the question says "in October" and not "for October."

Another source: "According to the leading scholar of Lincoln's personal finances, the president was paying $61 monthly, or 3 percent of his $25,000 salary, minus a $600 exemption. These payments, moreover, were being directly withheld from Lincoln's pay in the manner prescribed by the 1862 revenue act." This source does not state when the withholding became effective.
http://www.taxhistory.org/www/features.nsf/Articles/27B1BC08AC974BBD85257BAA00436F8B?OpenDocument

 

[adisciu9]

$61 less than Sept due to new income tax imposed on his salary

 

[UCVRelics]

In 1862, why did Abraham Lincoln receive less in salary in October than he had received in September and by how many dollars?

Income duty (tax) $61

 

[Montana Territory]

When the first federal income tax was imposed after September, 1862, Abraham Lincoln payed $61 monthly, or 3 percent of his $25,000 salary, minus a $600 exemption.


http://quod.lib.umich.edu/l/lincoln2/5250244.0001.001/1:17.4?rgn=div2;view=fulltext
http://www.taxhistory.org/thp/readings.nsf/ArtWeb/4481BB3C2C09C77C85257BE400723DF9?OpenDocument
http://focus-cpa.com/wp-content/uploads/2014/04/04-2014-Newsletter-Web.pdf

 

[CheathamHill]

Monday October 6, 1862:
Lincoln receives September salary warrant for $2,022.33 which is $61 under previous warrant as result of 3 per cent income tax deduction.

http://www.thelincolnlog.org/Results.aspx?type=basicSearch&terms=salary&r=L1NlYXJjaC5hc3B4
&
http://quod.lib.umich.edu/l/lincoln2/5250244.0001.001/1:17.4?rgn=div2;view=fulltext
http://quod.lib.umich.edu/l/lincoln2/5250244.0001.001/1:17.4?rgn=div2;view=fulltext
"..Some time was required to set up the machinery of collection, with the result that the first withdrawal of $61 from Lincoln's salary warrant was not made until September, 1862. Thereafter his warrant was reduced from $2,083.33 to $2,022.33 a month."

 

[Mark Roth]

Income tax.

$61.

(New Here. Hope I'm not stepping on anyone's toes by jumping in)

Edit - Correct, Mark Roth. You're certainly not stepping on anyone's toes. Welcome to CivilWarTalk and to the trivia game.

If you haven't done so already, you're invited to stop by the New Recruits Meet & Greet forum to introduce yourself to some more CivilWarTalkers. (Maybe you can offer some bowling tips while you're there. )

Hope you'll come back and play the trivia game again.

Hoosier

 

[57th Indiana Infantry]

Internal Revenue Act of July 1, 1862

Some time was required to set up the machinery of collection, with the result that the first withdrawal of $61 from Lincoln's salary warrant was not made until September, 1862. Thereafter his warrant was reduced from $2,083.33 to $2,022.33 a month.

$61

$25,000 in 1862 = $700,00 today