Dec
23
2009
W. Marc Gilfillan, CPA, NC, individual and business CPA and Tax expert, shares about the history of taxes…
1861 - After Lincoln was elected, the South walks out of Congress and create the Confederate States of America with a rewritten constitution to curtail the power of their newly formed country to tax.
1862 - The first US income tax is levied to assist the financing of the sudden and huge debts 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 is abolished.
1894 - Congress creates an income tax as a result of complaints that large reliance on tariffs pushes up the price 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 the idea that the 1894 income tax law is in direct conflict with the US Constitution’s restrictions on levying direct tax.
1913 - The 16th Amendment is passed and removes that bar and Congress establishes an income tax system.
1917 - World War I financial needs push up tax rates, with the maximum rate jumping to 77% in 1918.
1924 - Publication of the names of taxpayers and how much they owe fails to complete the goal of forcing payments and the practice ends.
1942 - Prior to World War II, the lowest income level for filing income tax left most working people out. However, the war’s cost pushed the threshold down the income ladder and put the top rate to ninety-four percent before the war was over.
1943 - In order to enforce compliance from the sharply increased number of taxpayers, Congress creates tax withholding from wages, which basically turned employers into tax collectors.
In the 1940s Justice Jackson of the Supreme Court, former chief counsel of IRS, boasted about how law-abiding Americans were in reporting their income taxes. It was an honor system - there were only a few informational returns. Tax resisters were few and the black market was relatively small.
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
