Dec
28
2009
A Short Timeline of Tax Law of the US, Part Two
Author: adminW. 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!
http://www.marccpa.com/
Tags: accountant, bookkeeping, cpa, income tax, marc gilfillan, NC, raleigh, tax, tax preparation, tax return, taxes
