MSN.com has a nice article about how Americans have been paying on the phone bills for a tax instituted to pay for the Spanish-American war in 1898.
If you have access to the Historical New York Times you can read about the debate over the bill to fund the war. Apparently, members of the House agreed that a new tax would be required to pay for the war (what a concept), but debated over what form the tax should take. The Republican Party favored the a tax on consumption and business transactions, while the Democrats and Populists favored an income tax. The Democrats ended up being out-voted.
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