Continuing my proud tradition of celebrating milestone birthdays of random things, I would like to take the time to wish the federal income tax a very happy hundredth birthday!
Happy (Slightly Belated) Birthday, Income Tax!
Can you imagine a world without income tax? Me neither. Still, in our proud nation’s not-too-distant past, citizens lived in world with no income tax whatsoever. The government relied on tariffs (from import goods) and taxes (on domestic goods) to pay its bills. After a series of costly wars, the government realized that it was no longer making ends meet through tariffs and (sales) taxes alone.
A Brief History of Your Least Favorite Governmental Institution
Prior to the Civil War, no one in the United States found the idea of an income tax appealing or feasible. It was not until 1862, when the (Union) government realized the need for additional funding, that the first income tax came to be. (Your best friend, the Internal Revenue Service, was established at the same time.)
Congress always intended for the nation’s first income tax to be a temporary thing. In fact, after the war ended, income tax ceased to exist. Still, in 1894, the government made a pass at trying income tax again.
It did not go so well. In 1895, the Supreme Court ruled that taxing income in peacetime was unconstitutional. So Congress did what Congress does; it passed the 16th amendment. On October 4, 1913, the United States Income Tax Code became the law of the land.
More Fun Facts about Income Tax!
In 1913, the tax code had 400 pages. Today, it has 73,608.
In the years immediately following WWII, the average income tax rate in the US was between 70 and 80 percent.
In 1943, the government began withholding taxes on paychecks.
The largest tax cut in history was in 1981. ($750 billion dollars)
The IRS employs more people than the FBI.
What do you think about income taxes? Are you filled with dread at the very thought or do you enjoy filling out the forms? (I enjoy filling out the forms.)
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