Copyright © 2008 Henrietta W. Hay
March 21, 2008
"Certainty? In this world nothing is certain but death and taxes." Benjamin Franklin was a very wise man.
April 15 is coming - rapidly. The past few days I have been very much aware of the fact. I have been doing my spring chore. I did, however find that getting tax material collected and sorted when I can't see the numbers made this year a bit more exciting than past years. I assume that my C. P. A. has excellent eye sight.
Complaining about taxes has been a standard American hobby since the days of the Revolution.
Will Rogers commented that "The income tax has made liars out of more Americans than golf."
Taxation did not spring to life fully printed, complete with rule books. The tax system grew slowly and went through many different phases.
From 1791 to 1802, we were supported by internal taxes on distilled spirits, carriages, refined sugar, tobacco and snuff, corporate bonds, and slaves. Today we might call it a luxury tax.
When the Civil War came along, Congress enacted the nation's first income tax law. As a matter of interest, here's what it cost your ancestor. A person earning from $600 to $10,000 per year paid taxes at the rate of 3%. Of course, the guy earning $10,000 could probably have bought the town.
Then in 1913, the 16th Amendment to the Constitution made the income tax a permanent fixture in the U.S. Five years later annual internal revenue collections passed the billion-dollar mark for the first time.
And it grew and it grew as the population grew. It became a political issue. Some presidents achieved a surplus and some presidents created a deficit. Mr. Bush's deficit is roughly $3 trillion.
A favorite American pastime is complaining about taxes, and we have become very good at it. We seem to think that schools and bridges and government buildings can be created by magic.
But through it all, a nation's tax system is not a luxury designed by government to make you mad, but a necessity. James Madison, U. S. president, stated the one essential fact. "The power of taxing people and their property is essential to the very existence of government.''.
Personally, I never paid a lot of attention to preparing or paying of income taxes until the first son came along in 1940. Today my family and friends are completely amazed to learn that I still have the family's 1040A tax return form for 1940 in my file. Well, it says "Copy to be retained by Taxpayer," and I didn't want to break the law!
It consists of a single page with printing on the front and back. Under income it includes salary, interest, dividends and "other." There were a few lines for deductions. And the rate was 3%. Our tax bill that year was zero.
I look at that single piece of paper and then at today's tax forms.
What have we done? One of the presidential candidates during the first debate waved a single sheet of paper around. He said that if he were president he would simplify the return to one page. Others promised to eliminate the IRS.
Meanwhile, try to figure out the current tax form if you can. Do you think this whole column is confusing?
"The hardest thing in the world to understand is the income tax." Those words came from Albert Einstein. What ever happened to e = mc squared?