Thursday, April 15, 2010

Tax Day: A History Lesson

April 15th. A day that most Americans would like to skip. Time to pay the government once again...and the government doesn't care whether you can afford it or not. Tax day wasn't always on April 15th in the United States. It used to be on March 15th. But so many Americans filed their taxes at the last minute and overwhelmed the IRS, that the decision was made to move it back one month and encourage Americans to file early. Yeah...didn't work. As soon as it was moved to April 15th, everyone relaxed for another month and just filed at the last minute again. 

The federal income tax first came into existence as an attempt to help fund the Civil war. The Union was able to raise 21% of war revenue from this tax. It would mark the first time personal income was taxed in this country, and it was, ironically, a fairly new idea borrowed from the British. It was meant to be a temporary/emergency tax, and it was repealed 10 years later when the government moved to a flat tax - which only lasted a year before it was ruled unconstitutional. 

In 1913, the 16th amendment to the constitution was ratified. It gave the government the permanent right to tax the income of citizens and businesses. It was passed under the guise of free-trade. The idea being that having income tax revenue would allow the government to reduce duties and tariffs, and encourage free trade. 1913 was also the year that the first form 1040 was created:

During World War II, the government started withholding taxes automatically out of paychecks, which increased revenue significantly. In 1913, the federal tax code (tax rules) was 400 pages long. In 1945, it had increased to 8200 pages. Today, the tax code exceeds 60,000 pages, and here is the current 1040 form:

The U.S. Government received $2.5+ trillion dollars in taxes for 2008. In regards to the portion from the individual income tax, the top 5% of earners pay 60% of the total. 

So there you have it - the history of tax day, in a nutshell. Some say to enjoy this day, because starting soon, the tax rate will rise, new taxes will be added, and we will look back on this year as the last year we paid low taxes. And to just say what you're all thinking -- if this is low, I'd hate to see high. But we can thank Obama, his administration, congress and all the idiots that support these criminals for the future tax hikes. There is no way to pay for Obamacare without hiking taxes and adding new ones such as the VAT. The only way to fund the deficit spending of the current regime is on the backs of the American people - and they won't flinch at making that decision. On this tax day, I will leave you with a poignant quote from Thomas Jefferson. I wonder if he knew how prophetic and applicable his words were as he penned them.

Just remember, as you write your check today, sign your return, or smile over a refund...the amount that we are taxed is not something completely out of our control. Taxes are certain - definitely; but we can reign in the government, limit their reach, put fiscal conservatives in power, and leave more money in the pockets of American citizens. More money in our pockets equals a stronger economy. We need to get involved this year, and change government this November...and beyond. To paraphrase Reagan -- we must starve the beast (government), so it has no choice but to become smaller. If we feed the beast, it will only grow larger and require more and more from us. We can change things in this country - but we have to act. Grumbling as you write your check doesn't change anything.

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