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

1861 – After Lincoln was elected, southerners walk out on Congress and create the Confederate States of America with a rewritten constitution to check the right of their newly formed country to tax.

1862 – The first US income tax is instituted to help finance the rising massive 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 in response to southerners complaining that excessive reliance on tariffs pushes up the costs of imported goods for farmers and consumers. Go here if you want help from a modern-day CPA firm in Raleigh, NC.

1895 – The US Supreme Court susta‌ins the idea that the 1894 income tax law is in direct conflict with the US Constitution’s restrictions on insituting direct tax.

1913 – Ratification of the sixteenth Amendment removes that bar and Congress creates an income tax system.

1917 – World War I financial needs bump up tax rates, with the maximum rate reaching 77% in 1918.

1924 – Publication of the names of taxpayers and the amount of taxes they owe fails to complete the task of forcing payments and the practice is given up.

1942 – Prior to World War II, the lowest income level for paying income tax left most working people out. However, the cost of the war pushed the threshold down the income ladder and sent the top rate to ninety-four percent prior to the war being over.

1943 – To force compliance from the hugely 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 to the IRS, gloated about how law-abiding Americans were in reporting their income taxes. The system was based on the user’s honesty – there were only a few informative returns. Tax resisters were few and the underground economy 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/