Happy 235th
Why we celebrate today:
Historically, citizens of the world’s nations derived their rights from their ruler – a king, emperor or military dictator.
The colonists of the original thirteen colonies were weary. They’d been under the subjugation of Britain for years. They have had to live in fear of the British soldiers; they were under the rule of King George III. The Colonist had to abide by laws that had been enacted by that rule, and had to pay taxes; It was plain to see the British seemed to be getting richer, while the colonist were getting poorer.
Great Britain kept trying to make the colonists follow more rules and pay higher taxes. People started getting mad and began making plans to be able to make their own rules. They no longer wanted Great Britain to be able to tell them what to do, so they decided to tell Great Britain that they were becoming an independent country.
The Second Continental Congress met in Philadelphia, Pennsylvania and they appointed a committee to write a formal document that would tell Great Britain that the Americans had decided to govern themselves.
May 1776, Adams offered the resolution which set the wheels in motion toward the actual writing of the Declaration.
The committee asked Thomas Jefferson to write a draft of the document. Working on a portable desk of his own construction, in a room at Market and 7th Streets in Philadelphia, the 33 year-old Thomas Jefferson set on paper the grievances and aspirations of the 13 colonies –
Connecticut, Delaware, Georgia, Maryland, Massachusetts Bay, New Hampshire, New Jersey, New York, North Carolina, Pennsylvania, Rhode Island, South Carolina, Virginia.
1,337 words beginning with “When in the course of human events …”
He worked for days, in absolute secret, until he had written a document that he thought said everything important that the committee had discussed.
On June 28, 1776, the committee met to read Jefferson’s “fair” copy. They revised the document and declared their independence on July 2, 1776. They officially adopted it on July 4, 1776. That is why we call it “Independence Day.”
Congress ordered that all members must sign the Declaration of Independence and they all began signing the “official” copy on August 2, 1776.
56 men signed the document, pledging to support it with “our lives, our Fortunes and our sacred Honor.”
President John Hancock signed first and his signature was the largest. Putting down his pen, he quipped: “There. Now George the Third can read my name without spectacles, and may now double his reward of 500 pounds for my head. That is my defiance.”
In January of the next year, Congress sent signed copies to all of the states.
The Declaration declared a revolutionary new doctrine: “We hold these truths to be self-evident, that all men are created equal, that they are endowed by their Creator with certain inalienable rights that among these are Life, Liberty and the pursuit of Happiness. That to secure these rights, Governments are instituted among Men, deriving their just powers from the consent of the governed.”
It was a bold new concept that individual liberty was a birthright.
On July 4, 1777, the night sky of Philadelphia lit up with the blaze of bonfires. Candles illuminated the windows of houses and public buildings. Church bells rang out load, and cannons were shot from ships. The city was celebrating the first anniversary of the founding of the United States.
The Fourth of July soon became the main patriotic holiday of the entire country. Veterans of the Revolutionary War made a tradition of gathering on the Fourth to remember their victory. In towns and cities, the American flag flew; shops displayed red, white, and blue decorations; and people marched in parades that were followed by public readings of the Declaration of Independence.
In 1941, Congress declared July 4 a federal legal holiday.
The Declaration of Independence is more than just a piece of paper. It is a symbol of our country’s independence and commitment to certain ideas. The signers of the Declaration of Independence wanted the citizens of the United States to have a document that spelled out what was important to our leaders and citizens.
They wanted us to be able to look at the Declaration of Independence and immediately think of the goals we should always be working for, and about the people who have fought so hard to make these ideas possible.
The people who signed the Declaration risked being hanged for treason by the leaders in Great Britain. They had to be very brave to sign something that would be considered treason, a crime punishable by death!
So every time we look at the Declaration of Independence, we should think about all of the effort and ideas that went into the document, and about the courage it took for these people to stand up for what they knew was right — independence!
Our Independence.
Happy Birthday America.
I assembled this information from the question from my daughter, “why do we celebrate July 4th?”
Test Your Faxing IQ this Tax Season
Like quizes? humm. How about a quest post desigened like a quiz?
By Steve Adams
Before email and filing tax returns online, there was the fax. At one time it was THE way to transmit important documents (such as W-2 statements and real estate tax information) quickly from one location to another.
While it’s normal to think that faxing has gone the way of the typewriter, it’s still a big part of the accounting world, and even the preferred method of document transfer in some cases.
So to make sure you have the most current information – and a good store of knowledge should you appear as a contestant on Jeopardy! and the Daily Double is a fax-related question – we offer the following quiz.
Fax Quiz
Q1. Faxing was invented in:
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- 1843
- 1945
- 1972
- 1984
- The correct answer is A. 1843—almost 20 years before the first Federal income tax was levied. The technology didn’t really become common in offices until the mid-1980s, but the basic concept was patented more than 150 years prior by Alexander Bain.
Q2. The amount of money spent on faxing the last few years has:
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- Increased
- Decreased
- Remained the same
- If you guessed B you’d be in good company. But you’d be wrong. The truth is the dollar volume spent on faxing has grown steadily over the last few years, and is projected to continue doing so.
Q3. Privacy laws allow you to send documents with a client’s Social Security Number on them by either email or fax:
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- True
- False
- False, with a caveat. Social Security Number protection laws vary from state-to-state, but it is illegal in at least some states to transmit a document that contains an SSN via standard email because it is considered too insecure, i.e. email can be intercepted or misdirected too easily. Even if the law allows the use of email, though, it goes against the industry’s best practices for the same reasons. Faxes are immune to this type of interception by the nature of how they are transmitted. Internet fax services that provide 128-bit encryption provide an additional level of security.
Q4. The number of trees that could be saved each year by delivering just one percent (1%) of paper faxes in America as electronic documents is:
-
- 15 million
- 27.2 million
- 52.5 million
- 73.5 million
- It is 73.5 million. That’s just one percent in one country. In addition, moving from fax machines to an Internet fax service would save energy and cut down on the waste stream by eliminating the need to dispose of the machine, toner containers and wasted paper.
Q5. Some advantages of an Internet fax service over a fax machine are:
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- No need to go back to the office to read your faxes
- Internet fax accounts never have busy signals on inbound faxes
- Because they’re electronic, your faxes can travel with you more easily
- Only A and C
- All of the above
- All of the above. Since Internet fax services are tied to your email account, you can receive faxes anywhere you can get email. That also means you can store your faxes on your laptop.
So how did you score? 4-5 correct: You are a faxing genius! 2-3 correct: You’re smarter than the average bear when it comes to faxes. 0-1 correct: Your old VCR is probably still flashing 12:00.
Steve Adams is vice president of marketing for Protus (www.protus.com), a provider of communications tools for small-to-medium-businesses and enterprise organizations, including the MyFax internet fax service; my1voice, a virtual phone service.
He can be reached at sadams@protus.com.
Thanks for the post Steve.
If you have a post that you think should be written for the “Taxing Public”, please send it my way, I will do my best to get it out.
Autumn 1621
Turkey day is finally here. So what does this mean to you?
History:
Thanksgiving Day is a harvest festival celebrated primarily in Canada and the United States. Traditionally, it is a time to give thanks for the harvest and express gratitude in general. While perhaps religious in origin, Thanksgiving is now primarily identified as a secular holiday.
For more of a history of the day, I found this Thanksgiving History.
As a nation, we should give this the recognition it once had and still deserves.
A brief overview of the alternative minimum tax (AMT).
The Alternative Minimum Tax (or AMT) is an extra tax some people have to pay on top of their regular income tax. Okay that sounds pretty messed up, doesn’t it?
In recent years, the AMT has been under increased attention. Why? Well, put simply, because the AMT is not cataloged or set up for inflation, thus because of recent tax cuts, an increasing number of middle-income taxpayers have been finding themselves subject to this tax. Until recently, the AMT affected less than 1% of all individual taxpayers. However, since the year 2000, the AMT has steadily grown, hitting roughly 3% of all taxpayers in 2005. Moreover, if left unchanged, the AMT will penalize nearly 20% of taxpayers by 2010. Almost 95% of all married filing joint couples.
The number of taxpayers affected by the Alternative Minimum Tax (AMT) is expected to exceed 30 million in 2010. Now that is really messed up.
So, lets back up a bit further. The original idea behind the AMT was to prevent people with very high incomes from using special tax benefits to pay little or no tax. The name comes from the way the tax works. The AMT provides an alternative set of rules for calculating your income tax. In theory, these rules determine a minimum amount of tax that someone with your income should be required to pay. If you’re already paying at least that much because of the “regular” income tax, you don’t have to bother with the AMT. Sadly on the other side of this issue, if your regular tax falls below this “minimum”, you have to make up the difference by paying an alternative minimum tax.
Okay, it is still messed up.
Some History
The AMT was introduced by the Tax Reform Act of 1969 and became operative in 1970. Why Was the AMT Enacted? Well, Congress enacted the AMT in 1969 following testimony by the Secretary of the Treasury that 155 people with adjusted gross income above $200,000 during tax year 1967 (In inflation-adjusted terms, their (the 155 people) 1967 incomes would be roughly $1.5 to 2 million in today’s dollars.), had paid zero federal income tax on their 1967 tax returns.
This tax avoidance by these “few” high-income taxpayers was widely perceived as unfair. Rather than directly addressing the problem by eliminating their deductions and credits in the tax code that were leading to the tax avoidance in the first place, Congress laid an additional layer of complexity over the regular income tax in the form of the AMT.
Again, It was intended to target 155 high-income households.
The Tax Equity and Fiscal Responsibility Act of 1982 holds the foundation for the present day individual alternative minimum tax, somewhat. Enough anyway for this article.
The alternative minimum tax operates in effect as a parallel tax system, with its own definition of taxable income, exemptions, and tax rates. Taxpayers compute tax owed under the “regular” and AMT systems and are liable for whichever is higher. The AMT system has in general a broader definition of taxable income, a larger exemption, and lower tax rates than the regular system.
In 1969 the minimum tax was a 10 percent flat rate. Over the years the AMT has evolved and increased in complexity. As of the latest revision, there is a two tier system: 26 percent and 28 percent for individuals.
There is an AMT for those who owe personal income tax, and another for corporations owing corporate income tax. Only the AMT for those owing personal income tax is described here.
History of the Alternative Minimum Tax
- Tax Reform Act of 1969 – Introduced the “add-on” minimum income tax of 10% in excess of an exemption of $30,000.
- Excise, Estate, and Gift Tax Adjustment Act of 1970 – Allowed deduction of the “unused regular tax carryover” from the base for the minimum tax.
- Revenue Act of 1971 – Imposed minor provisions regarding foreign income.
- Tax Reform Act of 1976 – Raised rate of minimum income tax to 15% and lowered exemption to $10,000 or half of regular taxes.
- Tax Reduction and Simplification Act of 1977 – Reduced minimum tax preference for intangible costs of drilling oil and gas wells.
- Revenue Act of 1978 – Introduced AMT alongside minimum income tax and moved certain itemized deductions and capital gains to AMT. AMT had graduated rates of 10%, 20%, and 25%, and an exemption of $20,000.
- Economic Recovery Tax Act of 1981 – Lowered AMT rates to correspond with reductions in rates of regular income tax.
- Tax Equity and Fiscal Responsibility Act of 1982 – Repealed “add-on” minimum tax. Made AMT rate a flat 20% of AMT income after exemptions of $30,000 for individuals and $40,000 for joint returns.
- Deficit Reduction Act of 1984 – Made minor changes concerning investment tax credit, intangible drilling costs, and other items.
- Tax Reform Act of 1986 – Raised AMT rate to 21%. Made high-income taxpayers subject to phase-out of exemptions. Increased number of tax preferences. Allowed an income tax credit for prior year AMT liability.
- Revenue Act of 1987 – Made technical corrections related to Tax Reform Act of 1986.
- Technical and Miscellaneous Revenue Act of 1988 – Made technical corrections related to Tax Reform Act of 1986.
- Omnibus Budget Reconciliation Act of 1989 – Made further technical amendments.
- Omnibus Budget Reconciliation Act of 1990 - Raised AMT rate to 24%.
- Energy Policy Act of 1992 – Changes regarding intangible costs of drilling oil and gas wells.
- Omnibus Reconciliation Act of 1993 – Introduced graduated AMT rates of 26% and 28%. Increased exemption to $33,750 for individuals and $45,000 for joint returns. Changed rules about gains on stock of small businesses.
- Taxpayer Relief Act of 1997 – Changes regarding depreciation and farmers’ installment sales.
- Tax Technical Corrections Act of 1998 – Adjusted AMT for new capital gains rates.
- Tax Relief Extension Act of 1999 – Changed rules about nonrefundable credits.
My next post, I hope to cover a bit more of, how to know if you need to bother with this AMT thing, and go over a little bit about how it works.
“See ya’”
History/Origin of piggy banks
Ever wonder about the history of the piggy bank? I began to wonder why and how saving your money in a replica of a pig become so popular? After all, for most of us, this was/is our first bout with saving our “hard earned income”.
I recently received my first piggy bank (at age 42). I’ve placed my new piggybank between my abacus and my collection of Mark Twain (this place was chosen because all my clients eyes are drawn there as they enter my office).
With that, I decided to research piggy banks and found that over time, piggybanks have become a timeless icon in America. Something that people of all ages recognize, all around the world.
Their history was quite unexpected. . .
In many societies, a pig was considered a family’s “food bank” and a symbol of good luck. They would buy a piglet from market and feed it meal scraps until it was so large they could sell it. Of course, most people today don’t keep pigs, but they do collect the banks.
Or, as I have come to believe, the most thought theory of this history. . .
In the mid-1500s when metal was scarce and expensive to be widely used, household pots and jars were made out of clay. The commonly used variety was an orange clay called “pygg.” – see explanation 1 below -
Pygg survived in its original pronunciation as “pug,” used originally for clay. People used to store items such as salt in wide necked jars which were made from the clay. Here, again, Families would collect any spare coins in these “pygg” jars that eventually came to be known as pygg banks. (Pronounced, “pug banks”)
Later, around the 18th century, the spelling was changed to fit new ideas about spelling. See explanation 2 below – potters and the local artisan were often asked to create pygg banks and by that time, the word sounded just like the word for the animal “pig.” And the banks were shaped like pigs presumably out of confusion of the meaning.
The trend caught on and soon adults and children throughout Europe wanted a” piggy bank” of their own.
Piggy banks are typically made of ceramic or porcelain, and now serve as an educational device to teach the basics of thrift and savings to children. The first varieties were ceramic and had no hole on the bottom so in order to retrieve any coins, the bank had to be broken. Someone later came up with the bright idea of adding a hole so coins could be taken out without destroying the bank.
Americans and Europeans are not the only ones who cherish piggybanks.
America: Piggybanks are given to children to encourage saving money.
China: Piggybanks are considered a lucky charm for children that encourage them to save money.
Europe: Piggybanks are given to children and adults and are thought to bring good luck and financial good fortune.
Germanic Countries: “Lucky Pigs” are given as gifts at the start of the New Year.
Today piggybanks have become highly collectible and some of the vintage varieties are valued at hundreds of dollars. There is even a new variety, the Money Savvy Pig, – Please see these post form Get rich slowly and the simple dollar.
Interesting piggybank tidbits. . .
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Clay bottles filled with hot water are still used as bed-warmers in parts of Britain, and are called “pigs” or “china pigs”; They, too, are often shaped like pigs as a visual pun.
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Sometimes called penny bank or money box.
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The famous phrase, “break the bank”, has nothing to do with the piggy bank.
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Pygg, the clay, and pig, the animal, took their names from the same root word. One is clay made from mud, and the other is the animal who lived in mud.
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British banks are banning piggy banks because they may offend some Muslims.
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Long ago, in German speaking countries, the piggy bank was used as a reward… craftsmen gave their apprentices piggy banks to reward them for years of learning their respective profession.
-
In Holland, children saved money given to them in a pig-shaped earthenware box which was not opened until Christmas. Known as the Feast Pig, it was the “ancestor” of our modern day piggy bank. When the child opened it, she was rewarded with an assortment of “wealth” and “riches” that had been saved over the entire year.
-
The oldest recorded piggy bank in the shape of a pig is claimed to be 1500 years old from Indonesia. If this is so, it precedes the “pygg theory” by around 1000 years!
For more information about piggy banks, the following resources are recommended: – The following two list are provided by Michele Alice, an AuctionBytes-Update Contributing Editor.
Books
“Bank Book,” by Bill Norman
http://tinyurl.com/55uss2
“Ceramic Coin Banks: Identification and Value Guide,” by Tom Stoddard and Loretta Stoddard
http://tinyurl.com/55g9dz
“Collectors Guide to Banks: Identification & Values: Pottery, Porcelain, Composition,” by Bev Mangus and Jim Mangus
http://tinyurl.com/62lnc2
“Collector’s Guide to Glass Banks: Identification $ Values,” by Charles V. Reynolds
http://tinyurl.com/67a5qc
“Modern Banks,” by Vickie Stulb
http://tinyurl.com/5ctlhe
“A Penny Saved: Still and Mechanical Banks,” by Don Duer
http://tinyurl.com/5zk3rp
Websites
The Piggy Bank Page (I like this one)
http://www.piggybankpage.co.uk
One of the best piggy bank sites offers concise history of piggy banks along with lots of pics and info about pigs by various potteries.
Pico’s Pigs
http://www.picospigs.com/Site/Index.asp?Lang=E
Italian/English site devoted to a personal collection. Nice pics, info, links.
When an Ordinary Ceramic Piggy Bank Is Worth More Than Its Contents
http://www.amazines.com/Collecting/article_detail.cfm/341079?articleid=341079
This article by Ruth Talbot discusses the highly collectible Wade-pottery piggy banks given away as promotions by Great Britain’s National Westminster Bank.
explanation 1
Pygg is a type of orange clay, once widely used for making pottery in the form of jars, cookware, and other household items due to its economical characteristics.
A piggy bank was originally a “pygg jar.” Later, the word “pygg” became less common, and its sound was reinterpreted as “pig”; only then did piggy banks actually begin to be made in the shape of a pig. The original pronunciation of “pygg” was probably closer to “pug,” but over time, the pronunciation changed due to the Great Vowel Shift and became a homonym of “pig.”
explanation 2
The Great Vowel Shift, which occurred in English back between Chaucer and Shakespeare, when sounds began moving forward in the mouth.
also “Bank” originally meant “bench”.
The Idea behind the term "Black Friday"
This is kind of a “passing the week . . .” post but first I wanted to put a collection of history tidbits and info out there for you. At the end or after you’ll find a links to a few post of interest.
The idea behind the term “Black Friday” is that this is the day in which retail stores have enough sales to put them “in the black” – an accounting expression that alludes to the practice of recording losses in red and profits in black.
So where did the term “Black Friday” come from?
In 1975 the shopping craze that followed Thanksgiving turned into Black Friday, in reference to the hectic crowds and horrendous traffic. Despite a slipping economy shoppers still came out in full force that year and caused several newspapers to call the day ‘Black Friday’, and thus the tradition began.
The earliest uses of “Black Friday” come from or reference Philadelphia and refer to the heavy traffic on that day, an implicit comparison to the extremely stressful and chaotic experience of Black Tuesday (the 1929 stock-market crash). The earliest known reference to “Black Friday” (in this sense), refers to Black Friday 1965 and makes the Philadelphia origin explicit:
JANUARY 1966 — “Black Friday” is the name which the Philadelphia Police Department has given to the Friday following Thanksgiving Day. It is not a term of endearment to them. “Black Friday” officially opens the Christmas shopping season in center city, and it usually brings massive traffic jams and over-crowded sidewalks as the downtown stores are mobbed from opening to closing.
The term Black Friday began to get wider exposure around 1975, as shown by two newspaper articles from November 29, 1975, both datelined from Philadelphia. The first reference is in an article entitled “Army vs. Navy: A Dimming Splendor,” in The New York Times:
“Philadelphia police and bus drivers call it “Black Friday” – that day each year between Thanksgiving Day and the Army-Navy game. It is the busiest shopping and traffic day of the year in the Bicentennial City as the Christmas list is checked off and the Eastern college football season nears conclusion.”
The derivation is also clear in an Associated Press article entitled “Folks on Buying Spree Despite Down Economy,” which ran in the Titusville Herald on the same day:
Store aisles were jammed. Escalators were nonstop people. It was the first day of the Christmas shopping season and despite the economy, folks here went on a buying spree. … “That’s why the bus drivers and cab drivers call today ‘Black Friday,’” a sales manager at Gimbels said as she watched a traffic cop trying to control a crowd of jaywalkers. “They think in terms of headaches it gives them.”
It is an Accounting practice:
Look up in the red, in the black in Wiktionary, the free dictionary. Many merchants objected to the use of a negative term to refer to one of the most important shopping days in the year. By the early 1980s, an alternative theory began to be circulated: that retailers traditionally operated at a financial loss for most of the year (January through November) and made their profit during the holiday season, beginning on the day after Thanksgiving. When this would be recorded in the financial records, once-common accounting practices would use red ink to show negative amounts and black ink to show positive amounts. Black Friday, under this theory, is the beginning of the period where retailers would no longer have losses (the red) and instead take in the year’s profits (the black). The earliest known use, found by Bonnie Taylor-Blake, is from 1981, and presents the “black ink” theory as one of several competing possibilities.
The day after Thanksgiving in the United States. Retailers generally see an upward spike in sales and consider this to be the start of the holiday shopping season.
Historically Black Fridays have never been good events. History has shown many ‘Black’ days, most with dire consequences.
1. A day of stock market catastrophe. Originally, September 24, 1869, was deemed Black Friday. The crash was sparked by gold speculators, including Jay Gould and James Fist, who attempted to corner the gold market. The attempt failed and the gold market collapsed, causing the stock market to plummet.
2. The term “black” has been used to describe other disastrous days in financial markets. For example, on Black Tuesday, October 29, 1929, the market fell precipitously, signaling the start of the Great Depression.
3. Black Friday in January 1939 refers to Australia’s day of horrible and devastating fires.
4. The largest one-day drop in stock market history occurred on Black Monday, October 19, 1987, when the Dow Jones Industrial Average plummeted more than 22%.
So what happened this time around? With the economy the way it is many are concerned. Businesses wondering about their sales (many make 30% of their income during this month) and the rest wondering about the economy.
Well I am currently working for a Toy distributor (I even worked yesterday) and the rumor from the “big boss” is that their stores reported higher sales Friday than in past “Black Fridays”.
Early data show strong Black Friday
Shoppers, clerks say ‘Black Friday’ crowds seem lighter
taxguy has a few mentions this week (and I would like to point out, it is “taxguy” not Taxguy, or Tax Guy or whatever else has been put out just plain and simple, no caps one word taxguy. Why? The same reason I guess a parent names a child Elizabeth and demands people call her Elizabeth and not Lisa, or Beth.)
Issue #4: Dr. Tax-O-Sphere, Or How I Learned to Stop Worrying and Love the Tax Code including pictures of your favorite tax bloggers.
Macho Macho tax blogs describes a site that shows you the chances in a blog (of a blog) if the author is male. As Joe points out it isn’t very accurate as it shows a few females bloggers ( including “Taxgirl”) as being “manly”. Although I question the overall findings, I found it interesting the score taxguy was given.
Friday inspiration: Facing an ugly reality and making changes. A mess I am in and trying to fix. An interview that I am now grateful I participated in and would encourage others to take part in this. The questions are pretty basic for everyone, if you can answer them, please respond to the request that is at the end of the post/interview.
And the Nominees for 2008 Twelve Blogs of Christmas are -
Okay enough about taxguy. . .
What the government should be doing during a recession
Tax Tips, Rates and Brackets for 2009 Returns
Russia to Cut Corporate Taxes, Washington Dithers
Some IRS History. . .
The U.S. government’s privilege to levy taxes was incorporated into the Constitution in 1787. The responsibility for how to collect these taxes fell to the Treasury Department where it has stayed. 30years later the issue of taxes was abandoned due to our governments needs were being met by taxes on imports. So no more taxes for citizens.
45 years later the Revenue Act of July1, 1862 was signed by President Lincoln due to the outbreak of the Civil War and the governments need for funding it. This established our nation’s first real income tax. The Internal Revenue Service is officially born.
When the war ended, as before, the nation’s financial needs were being met by the taxes on imports, along with taxes on tobacco and alcohol. This resulting in some 90% of our internal revenue. In 1872 (10 years after its birth) the “income tax” was once again abolished.
Congress revived the income tax in 1894, but the Supreme Court ruled it unconstitutional the following year.
18 years after the Supreme Court ruling, Wyoming ratification of the 16th Amendment, provided the three-quarter majority of states necessary to amend the Constitution. The 16th Amendment gave Congress the authority to more or less re-enact an income tax. That same year, the first Form 1040 appeared after Congress levied a one percent tax on net personal incomes above $3,000 with a 6 percent surtax on incomes of more than $500,000.
Five years later, during World War I, the top rate of the income tax was raised to 77 percent to help finance the war effort. In the post-war years, that dropped down to 24 percent by 1929, and rose again during the Depression.
During World War II, Congress introduced payroll withholding and quarterly tax payments.
I am compiling a historical highlight section for my website that I don’t have completed (not that my site is up yet either) yet but when it is going I will be directing more to it and from it.
If you want to get a look at what the first 1040 form looked like with it’s instructions follow the link below to where the IRS has as a pdf file reproduction.
“first 1040 form and instructions”
Some things of interest to notice:
1. Taxes were only paid on income above $3,000, equivalent to $61,000 in today’s dollars, at the initial rate of only 1%.
2. The highest marginal tax rate in 1913 was 6%, which applied to income above $500,000, equivalent in today’s dollars to a little over $10 million.
3. The entire 1040 tax form in 1913, including all forms and instructions, and was only 4 pages. All instructions in 1913 were contained on a single page, compared to the 2007 1040 Instructions, which held 92 pages long, (without any forms).
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