Q:

Who decides the federal tax percentage?

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Quick Answer

Article 1, Section 8 of the U.S. Constitution grants Congress the power to control the federal tax percentage, as stated by faculty of the University of Missouri-Kansas City. The Congress may impose and collect any taxes that support the general welfare or the defense of the country.

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Congress received permission to impose a new federal income tax in 1913 with the 16th amendment, says the IRS. The first 1040 form came shortly afterwards when the United States Congress created a 1 percent income tax for people who earned a net income of $3,000 and a 6 percent tax on those who earned a net income of more than $500,000.

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