An early version of the federal inheritance tax, also known as the estate tax, was first authorized by Congress in 1797 and took the form of a stamp act, according to the Heritage Foundation. Multiple subsequent estate taxes were enacted over the next 200 years.
The modern estate tax dates to the Revenue Act of 1916, notes the Heritage Foundation. This act, which was mainly concerned with introducing a progressive tax on income, included a provision for the taxing of deceased persons' estates worth over $50,000. The tax started at 1 percent and rose as high as 10 percent for estates in excess of $5 million.