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A Brief Timeline of Taxation Practices of the US, Part 2

Raleigh NC CPA

W. Marc Gilfillan, CPA, NC, individual and business CPA and Tax expert, shares about the history of taxes…

1861 - After Lincoln was put in office, southerners walk out of Congress and create the Confederacy with a new constitution to check the right of their new government to tax.

1862 - The first US income taxes is instituted to assist the financing of the sudden and huge 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 passes an income tax as a result of southerners complaining that excessive 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 susta?ins the idea that the 1894 income tax law conflicts with the US Constitution’s restrictions on levying direct taxes.

1913 - Ratification of the sixteenth 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 seventy-seven percent in 1918.

1924 - Publicating the names of taxpayers and how much they owe fails to achieve the goal of enforcing paying the taxes and the practice ends.

1942 - Prior to World War II, the income threshold for paying income tax left most working people out. But the war’s cost pushed the threshold down the income ladder and sent the top rate to 94% before the war was over.

1943 - In order to force compliance from the hugely increased amount 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 of IRS, boasted about how law-abiding Americans were in reporting their income taxes. It was an honor system - there were very few informational returns. Open resistors to the taxes were few and the black market 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!

http://www.marccpa.com/

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