Where did funding come from for the Civil War(US), and what were the motivating factors for the contributors?

Answer 1

Yes, the Federal Government has instituted an income tax to help pay for the war, that is a very good point. Both sides also issued large amounts of bonds, but by far the North was much more successful. This was because California remained in the Union, and thus the Federal Government had a secure source of GOLD to back up their bonds (the Confederacy was always hurt by the fact it had very little hard currency or assets to back their currency, leading to hyper-inflation. They took this very seriously, to the point of launching a huge raid into Colorado to seize a federal mint and silver mine in Denver - another story). Both sides also were able to obtain loans from foreign governments, again the North was much more successful in this. While the Confederacy was only able to obtain one major European loan (from the Erlanger company in France), the Federal government was able to get massive credits from Russia (which was fighting its own isurrection in Poland) and the Russian fleet even docked in New York harbor to show support for Lincoln's efforts.

Answer 2

Taxes - in fact, we owe the concept of income taxes to the Civil War. They had never existed before this. In addition, there were increased import duties and other fees and taxes. It was, however, very difficult to make ends meet.