Why did the Wilson administration impose a graduated income tax in 1913?

A) Correctly predicting the coming of World War I, Wilson hoped to bolster the federal budget for defense.
B) Having imposed a ban on liquor sales, Wilson had to find a way to compensate for the lost excise tax.
C) Wilson was trying to fulfill his campaign promise of "soaking the rich."
D) Wilson had promised Republicans a graduated income tax, but only if in return they supported his declaration of war.
E) The substantial reduction of duties on imports required Wilson to make up for lost revenue.

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Talha Saleem · Accepted Answer

Final Answer : E, Explanation :  The Wilson administration imposed a graduated income tax in 1913 primarily because the Underwood Tariff Act significantly reduced duties on imports, which decreased the federal government's revenue from tariffs. To compensate for this loss, a graduated income tax was introduced as part of the same legislative effort, marking a shift towards direct taxation of citizens' incomes.

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