And I mentioned in that email, there are rumors that said people would be able to take a deduction for donations to Haiti on the current year’s (2009) tax return - instead of having to wait until you do your 2010 tax return. Obviously this could be a huge incentive for people who desired to give a part of their wealth to the victims of disaster in Haiti to assist them in getting back on their feet! Are you feeling the pressure of today’s taxes? Right now you can get $100 off your tax return for Cary NC Tax Preparation needs!
As it turns out, the rumors I was hearing and that you possibly have heard are TRUE! On January 22nd, the IRS created a special tax relief policy that allows contributions for the Haiti disaster made after January 11, 2010 and before March 1, 2010, will be taken from your 2009 tax return. Or, you can choose to put the deduction to your 2010 tax return instead, on the chance that in case you did not desire to take advantage of the great incentive to assist those in need.
The people of Haiti are hurting quite a bit. These kinds of disasters are totally unavoidable, and are well, devastating. Earthquakes and other types of natural disaster create huge levels of carnage and widespread loss of homes. Entire families are without food or clean water. In most cases these families do not even have any sort of stable living environment without the help of relief organizations (funded by donators like you!). Do your part right now and donate whatever you can to help the people of Haiti. I would certainly appreciate the extended donations, and I’m positive all of the struggling people in Haiti would appreciate it to!
Stay tuned for more articles and information regarding tax season, taxes, and Haiti!
W. Marc Gilfillan, CPA, NC, individual and business CPA and Tax expert, shares about the history of taxes…
So the question remains, what went wrong with taxes in the US?
US tax makers have been reaping what they have sown for quite a while. Our honor system has been trumped by a monster in which all taxpayers are under watch because of the heavy inclination of evasion. Basically, consent has been replaced with compulsion. Honor has been replaced with spying on citizens. If you are feeling the pressure with today’s taxes, call a Cary NC CPA for all your tax-related needs!
In the 1950s, no bank told the IRS about customer affairs, interest rates went unreported, withdrawals of money were not reported, and not a thing that went through any account was photographed. Also, real estate transactions weren’t reported, stock transactions were not reported, dividends were not reported, income from other sources (Form 1099) was not reported, and US Customs didn’t require a declaration of the amount of money carried. Go here if you want help from a modern-day Tax Preparation in Cary, NC.
It was an honor system, and it worked. The deterioration that happened over the last fifty years to the present is that everything of any fiscal significance is now reported.
Adam Smith said that people will evade taxes and tax laws shown little respect when there is a general suspicion of much meaningless expense and great misspending of tax revenue. For example, $500 toliet seats, huge grants to study the sex lives of ants, etc.
Because the government wanted to catch a handful of tax resisters and evaders in the 1950s Congress made a tax monster of the US tax system that more and more taxpayers try to evade. As a general rule, mass tax evasion is a clear signal that a government’s tax system is bad. Citizens will pay taxes, even income taxes, if the rates are acceptable.
W. Marc Gilfillan, CPA, NC, individual and business CPA and Tax expert, shares about the history of taxes…
1861 - After Lincoln’s election, the South walks out of Congress and form the Confederacy with a rewritten constitution to keep the newly formed government right to tax in check.
1862 - The beginning of US income taxes is created to help finance the sudden and massive costs of the Civil War. If you’re feeling the pressure with today’s taxes, call a CPA for Tax Preparation in Raleigh, NC for all your tax-related needs!
1872 - The income tax gets struck down.
1894 - Congress creates an income tax as a result of southerners complaining that excessive reliance on tariffs pushes up the costs of imports for farmers and consumers. Go here if you want help from a modern-day CPA firm in Raleigh, NC.
1895 - The US Supreme Court holds that the 1894 income tax law is in direct conflict with the US Constitution’s bars on insituting direct taxes.
1913 - Ratification of the 16th Amendment removes that bar and Congress establishes an income tax system.
1917 - World War I revenue requirements bump up tax rates, with the largest rate reaching 77% in 1918.
1924 - Publication of the names of taxpayers and the amount of taxes they owe fails to achieve the goal of forcing payments and the practice is given up.
1942 - Prior to World War II, the lowest income level for paying income tax excluded most wage earners. However, the cost of the war bumped the threshold down the income ladder and put the top rate to ninety-four percent before the war was over.
1943 - To force compliance from the sharply increased number of taxpayers, Congress institutes tax withholding from wages, effectively turning employers into tax collectors.
In the 1940s Justice Jackson of the Supreme Court, former chief counsel of IRS, gloated about how honest Americans were in turning in their income taxes. It was an honor system - there were very few informational returns. Tax resisters were few and the underground economy was of little significance.
1962 - IRS Commissioner Caplin stated “no other nation in the world has ever equaled this record of voluntary compliance. It is a tribute to our people, their tradition of honesty, and their high sense of responsibility in supporting our government.”
1982 - Chief Justice Neely said - “cheating on federal and state income tax is all pervasive in all classes of society; except among the compulsively honest, cheating usually occurs in direct proportion to opportunity.”
Stay tuned for Part 3 of the Timeline of US Tax Policy!
W. Marc Gilfillan, CPA, NC, individual and business CPA and Tax expert, shares about the history of taxes…
From 1868 until 1913, about 90% of the federal government’s revenue was gotten from tax on whiskey and tobacco. During the Civil War the government instituted a short income tax, but it was not until 1913 when the sixteenth Amendment permitted Congress to tax incomes “from whatever sources attained.” The first 1040’s were due on March 1, 1914. There was not any money withheld from paychecks and no money was sent in with the return. Every taxpayer’s computations were calculated by IRS field agents and a bill sent to the taxpayer on the first of June.
1766 - Leaders of the colonies got together to protest British taxes in place by the Stamp Act. The Stamp Act Congress, as it was called, marked the start of the American independence movement and the beginning of the United States.
1782 - The first Congress under the Articles of Confederation met. This Congress didn’t have any ability to tax the people.
1789 - America gave a new Congress taxing powers. Without taxing powers, the first Congress of the U.S. scantly lasted 7 years prior to being dubbed a failure; the second Congress, granted taxation powers, is still functioning after almost 300 years. If you’re feeling the pressure with today’s taxes, call a CPA for Tax Preparation in Raleigh, NC for all your tax-related needs!
1792 - Alexander Hamilton persuades Congress to pass an excise tax on whiskey to increase earned income for the government and steady the increase in alcohol consumption. In the western frontier whiskey was the traditional medium of exchange, and the twenty-five percent tax was harsh. By 1794 the area was openly in rebellion. The father of the IRS was spawned to enforce the tax. Go here if you want help from a modern-day CPA firm in Raleigh, NC.
1832 - The national debt remaining from the Revolutionary War and the War of 1812 is paid off. The South sees no reason to continue high import taxes that increase prices for Southern consumers and promote industrial monopolies in the North.
1850 - John C. Calhoun of South Carolina warns Congress that the South might leave the Union due to the fact that the overly oppressive taxing of the South raised funds that were spent in the North, causing a great change in money from the South to the North.
Stay tuned for Parts 2 and 3 of the Timeline of US Tax Policy!
W. Marc Gilfillan, CPA, NC, individual and business CPA and Tax expert, shares about the history of taxes…
“Slavery - the one cause of the Civil War.” - John Stuart Mill, 1862
Can there be a doubtful thoughts about this topic? Certainly the American Civil War was about the slavery issue… was it not? Well actually, one of the most popular myths in our history is that the Civil War began over the slavery issue and that Lincoln, the Great Emancipator, used a terrible war to break the chains of bonding that shackled over three million black Americans. Right before the war, the South had everything its way.
In 1860, the South held the Supreme Court and Lincoln and Congress were approving a constitutional amendment to keep slavery for all time! What happened?
We should rewind the clock back to the year 1832. By that year the national debt from the War of 1812 had been paid and the South saw no need to keep up the high import taxes which appeared to only raise price tags for Southern consumers. Either the South paid high import taxes on imported goods or it purchased Northern manufactured goods at excessive prices. In either case, Southern money ended up in the North. To say the South wasn’t happy with this arrangement would be an understatement. If you’re feeling the pressure with today’s taxes, call a CPA for Tax Preparation in Raleigh, NC for all your tax-related needs!
So, in 1832 a convention was hosted in South Carolina to get rid of these federal import taxes. The convention decided the tax was unconstitutional and authorized the governor to defy the enforcing of the import taxes instituted by the national government. It seemed like a civil war was in the works. Cool heads won over, however, and the Great Compromise of 1833 lowered import taxes over the next several years to levels the South would tolerate. Go here if you want help with a modern-day Tax Return in Raleigh, NC.
Over the ensuing years, however, Northern corporate and manufacturer companies forced into Congress more taxes that once again stressed Southern planters and made Northern manufacturers become rich. In 1850, John C. Calhoun, the South’s most outstanding spokesperson, gave a speech to Congress. His speech spoke of three wrongs done to the South that could cause secession from the Union and war. The first two had to do with fears concerning the erosion of power of the South in general and the states as well.
The third, and really the only solid grievance, was about taxation. In Calhoun’s view, national import taxes was a targeted legislation against the South. Heavy taxes on the South raised money that was used in the North. The center of economic strength in the country was shifting heavily to the North. Calhoun threatened secession if the taxes weren’t lowered. But what about the slaves? Well, during his campaign for the presidency in 1860, Lincoln repeatedly said he wouldn’t interfere with slavery in the South. Actually, most Northerners didn’t care much about enslaved blacks, just as little as how much they worried about the Indian in the West or impoverished illiterate workers in factories. The majority of black slaves received better treatment and better compassion than their working-class counterparts in the North. Lincoln, actually, assured Southern plantation-owners that run-away slaves would be caught. The Congress and subsequently the Supreme Court (Dred Scott decision) further affirmed that slavery was here to stay.
But, as soon as Lincoln was elected and Congress came together in 1861, they created new high import tariffs. Slavery was not an issue - higher import taxes were. In his inaugural address Lincoln said he would go get the customs in the South even if there was a secession!
Fort Sumter, at the entrance of the Charleston Harbor, began filling with federal troops to enforce the collection of the new taxes. The Civil War started in 1861 when South Carolinians fired on the federal garrison at Fort Sumter. The conflict had been brewing for decades - but it was not about the slaves. It was over taxes.
Two years after that, Lincoln issued the Emancipation Proclamation, and then only after repeated military defeats, as a last resort to rally the North to a noble cause. With respect to the slave issue - most Northerners cared little about black people in bondage, any more than they thought about Indians in the west and the poor illiterate peasants in the factories. By and large, most black slaves got better treatment and greater compassion than their impoverished counterparts in the North.
W. Marc Gilfillan, CPA, NC, individual and business CPA and Tax expert, shares about the history of taxes…
1861 - After Lincoln’s election, southerners walk out of Congress and form the Confederate States of America with a rewritten constitution to sustain the new government right to tax in check.
1862 - The first US income tax is instituted to assist the financing of the rising massive costs of the Civil War. If you are feeling the pressure with today’s taxes, call a CPA for Tax Preparation in Raleigh, NC for all your tax-related needs!
1872 - The income tax gets struck down.
1894 - Congress creates an income tax in response to southerners complaining that large reliance on tariffs skyrockets the costs of imported goods for farmers and consumers. Go here if you want help from a modern-day CPA firm in Raleigh, NC.
1895 - The US Supreme Court holds the idea that the 1894 income tax law is in direct conflict with the US Constitution’s bars on insituting direct taxes.
1913 - Ratification of the sixteenth Amendment takes that bar away and Congress creates an income tax system.
1917 - World War I financial needs push up tax rates, with the largest rate reaching 77% in 1918.
1924 - Publication of the names of taxpayers and how much they owe fails to complete the task of enforcing paying the taxes and the practice is given up.
1942 - Prior to World War II, the lowest income level for paying income tax left most working people out. However, the war’s cost pushed the threshold down the income ladder and sent the top rate to ninety-four percent prior to the war being over.
1943 - To enforce compliance from the hugely increased number of taxpayers, Congress creates tax withholding from wages, effectively turning employers into tax collectors.
In the 1940s Justice Jackson of the Supreme Court, former chief counsel to the IRS, gloated about how honest Americans were in turning in their income taxes. The system was based on the user’s honesty - there were only a few informational returns. Tax resisters were few and the underground economy was of little significance.
1962 - IRS Commissioner Caplin said “no other nation in the world has ever equaled this record of voluntary compliance. It is a tribute to our people, their tradition of honesty, and their high sense of responsibility in supporting our government.”
1982 - Chief Justice Neely said - “cheating on federal and state income tax is all pervasive in all classes of society; except among the compulsively honest, cheating usually occurs in direct proportion to opportunity.”
Stay tuned for Part 3 of the Timeline of US Tax Policy!
W. Marc Gilfillan, CPA, NC, individual and business CPA and Tax expert, shares about the history of taxes…
Between 1868 to 1913, about 90% of the national government’s income was derived from tax on alcohol and tobacco. During the Civil War the government instituted a short income tax, but it was not until 1913 that the sixteenth Amendment was passed and enabled Congress to tax incomes “from whatever sources derived.” The initial 1040’s were due on March 1, 1914. No money was withheld from paychecks and none was sent away with the return. Each taxpayer’s taxes were checked by IRS field agents and a bill mailed to the taxpayer on the first of June.
1766 - Colony leaders met to protest British taxes in place by the Stamp Act. The Stamp Act Congress, as it was called, marked the start of the American independence movement and the beginning of the United States.
1782 - The first Congress under the Articles of Confederation met. This Congress had no ability to tax the people.
1789 - Americans granted a newly formed Congress the ability to tax. Without taxing powers, the initial Congress of the U.S. scantly survived 7 years before being declared a failed attempt; the 2nd Congress, granted taxation powers, is currently going strong after more than two hundred years. If you’re feeling the pressure with today’s taxes, call a CPA for Tax Preparation in Raleigh, NC for all your tax-related needs!
1792 - Alexander Hamilton coerces Congress to pass an excise tax on whiskey to increase revenue and curb drinking. In the western frontier whiskey was the basic mode of exchange, and the twenty-five percent tax was a bit difficult to deal with. By 1794 the area was openly in rebellion. The father of the IRS was created to enforce the tax. Go here if you want help from a modern-day CPA firm in Raleigh, NC.
1832 - The national debt that remained after the Revolutionary War and the War of 1812 is finally accounted for and paid. The South does not see any reason to continue high import taxes that raise prices for Southern consumers and increase the number of industrial monopolies in the North.
1850 - John C. Calhoun of South Carolina warns Congress that the South might leave the Union due to the fact that the overly oppressive taxing of the South raised funds that were spent in the North, causing a great shift in money from the South to the North.
Stay tuned for Parts 2 and 3 of the Timeline of US Tax Policy!
W. Marc Gilfillan, CPA, NC, individual and business CPA and Tax expert, shares about the history of taxes…
“Slavery - the one cause of the Civil War.” - John Stuart Mill, 1862
Can there be a doubt concerning this topic? Certainly the American Civil War was about slavery… wasn’t it? Well actually, one of the most popular myths in American history is that the Civil War began because of slavery and that Lincoln, the Great Emancipator, started a bloody war to break the claims of bonding that enslaved over three million black Americans. Just prior to the war, the South had everything it could have wanted.
In 1860, Southerners held the Supreme Court and Lincoln and Congress were approving a constitutional amendment to keep slavery forever! What happened?
We should move the clock back to the year 1832. By 1832 the national debt from the War of 1812 had been paid and Southerners didn’t see a need to continue the exorbitant import taxes that seemed to only jack up price tags for Southern consumers. Either the South paid high import taxes on imported goods or it purchased Northern manufactured goods at terribly overpriced prices. In either case, Southern funds ended up in the North. To say the South wasn’t content with this arrangement would be an understatement. If you’re feeling the pressure with today’s taxes, call a CPA for Tax Preparation in Raleigh, NC for all your tax-related needs!
Consequently, in 1832 a convention was held in South Carolina to get rid of these federal import taxes. The convention declared the tax was unconstitutional and gave the governor the power to to defy the enforcing of the import taxes instituted by the national government. It looked like a civil war was in the making. Mild tempers prevailed, however, and the Great Compromise of 1833 reduced import taxes over the subsequent several years to levels the South would tolerate. Go here if you want help with a modern-day Tax Return in Raleigh, NC.
Over the ensuing years, however, Northern corporate and manufacturing interests bullied through Congress more taxes that once again oppressed Southern planters and allowed Northern Manufacturers to become rich once again. In 1850, John C. Calhoun, the South’s most outstanding spokesperson, gave a speech to Congress. It spoke of 3 wrongs done to the South that may lead to secession from the Union and war. The first two had to do with fears concerning the erosion of power of the South in general and the the power of state government as well.
The third, and only solid complaint, concerned taxation. In Calhoun’s view, national import taxes was a targeted legislation against the South. Huge amounts of taxation on the South raised money that was used in the North. The center of economic strength in the United States was steadily changing strongly to the North. Calhoun threatened secession if the taxes were not reduced. But what about the slavery issue? Well, in his run for the presidency in 1860, Lincoln repeatedly said he would not interfere with slavery in the South. Truly, most Northerners did not care much about enslaved blacks, any more than they cared about the Indian in the West or poor illiterate workers in factories. The majority of black slaves got better treatment and better compassion than their counterparts in the North. Lincoln, actually, assured Southern slave-owners that fugitive slaves would be returned. The Congress and subsequently the Supreme Court (Dred Scott decision) further acknowledged that slavery was here to stay.
However, right as Lincoln was elected and Congress assembled in 1861, they enacted new high import tariffs. Slavery was not an problem - higher import taxes were. In his inaugural address Lincoln said he would go get the customs in the South even if there happened to be a secession!
Fort Sumter, at the beginning of the Charleston Harbor, started to fill with Union troops to support the collection of the new taxes. The Civil War started in 1861 when South Carolinians fired on the federal garrison at Fort Sumter. The conflict had been brewing for decades - but it wasn’t over the slaves. It was over taxes.
Two years later, Lincoln put into action the Emancipation Proclamation, and then only following repeated military battles, as the last resort to rally the North to a worthwhile cause. To address the slave issue - most Northerners cared little concerning black people in bondage, no more than they cared about Native-Americans in the west or poor uneducated peasants in the factories. Ironically, most black slaves got better treatment and greater compassion than their impoverished counterparts in the North.
W. Marc Gilfillan, CPA, NC, individual and business CPA and Tax expert, shares about the history of taxes…
So the question remains, what happened with taxes in the United States?
US tax makers have been reaping what they have sown for a long time. The honor system has been replaced by a system in which every tax payer is under surveillance due to the strong threat of evasion. Basically, consent has been replaced with compulsion. Honor has been replaced with espionage. If you’re feeling the pressure with today’s taxes, call a Cary NC CPA for all your tax-related needs!
In the mid-20th century, there wasn’t a bank in the US that informed the IRS about the affairs of citizens who went to that bank, interest was not reported, withdrawals of cash weren’t reported, and nothing that went through accounts were photographed. Also, real estate transactions were not reported, stock transactions were not reported, dividends weren’t reported, income from other sources (Form 1099) wasn’t reported, and US Customs didn’t require a declaration of cash carried. Go here if you want help from a modern-day Tax Preparation in Cary, NC.
It was an honor system, and it functioned quite well. The deterioration that occurred over the last fifty years to the present is that anything of any fiscal significance is now reported.
Adam Smith said that taxes will be evaded and tax laws shown little respect when there is a general suspicion of a lot of meaningless expense and a lot of misapplication of the public revenue. For example, $500 toliet seats, huge grants to study the sex lives of ants, etc.
Because the government wanted to catch a handful of tax resisters and evaders in the 1950s Congress made a tax abomination of the US tax system that more and more taxpayers attempt to evade. As a general rule, widespread tax evasion is a clear signal that a government’s tax system isn’t working. Citizens will pay taxes, even income taxes, if the rates are acceptable.
W. Marc Gilfillan, CPA, NC, individual and business CPA and Tax expert, shares about the history of taxes…
So the question remains, what happened with taxes in the US?
US tax makers have been reaping what they have been sowing for quite a while. Our honor system has been trumped by a system in which every tax payer is under watch because of the strong inclination of evading their taxes. In other words, compulsion has replaced consent. Honor has been replaced with spying on citizens. If you are feeling the pressure with today’s taxes, call a Cary NC CPA for all your tax-related needs!
In the 1950s, no bank told the IRS about customer affairs, interest rates went unreported, withdrawals of cash weren’t reported, and nothing that went through any account was photographed. In addition to this, real estate transactions weren’t reported, stock transactions were not reported, dividends were not reported, income from other sources (Form 1099) wasn’t reported, and US Customs didn’t require a declaration of the amount of money carried. Go here if you want help from a modern-day Tax Preparation in Cary, NC.
It was an honor system, and it worked. The deterioration that happened over the last 50 years to now is that anything of any fiscal significance is now reported.
Adam Smith stated that people will evade taxes and tax laws shown no credence when there is a general suspicion of much unnecessary expense and great misapplication of tax revenue. For example, $500 toliet seats, huge grants to study the sex lives of ants, etc.
Because the government wanted to catch a handful of tax resisters and evaders in the 1950s Congress made a tax abomination of the US tax system that more and more taxpayers attempt to evade. As a general rule, widespread tax evasion is a sure sign that a government’s tax system is bad. People will pay taxes, even income taxes, if the rates are acceptable.
