Letme end a week of tax history with a brief overview -
1643: The colony of New Plymouth,Massachusetts levies the first recorded income tax in America.
1861: Congress passed the firstincome tax law as an emergency measure to fund the Civil War.
1872: Congress repeals the incometax law.
1894: As a response to complaintsthat excessive reliance on tariffs as a source of revenue resulted in anincrease in the cost of imported goods, Congress again passed an income taxlaw.
1895: The US Supreme Court ruledthat the income tax law was unconstitutional.
1913: In February the 16th Amendmentwas ratified by the necessary 3/4 of the states. On October 3rd Congress passedthe Revenue Act of 1913, which created the first permanent US income tax. In the first year only 1 out of every 271American citizens were taxed and $28 Million in revenue was raised.
1916: The Federal Estate Tax wasenacted to help generate additional revenue to fund America's anticipated entryinto the first World War.
1917: Congress raised tax rates inresponse to the increasing cost of the war and approved credit for dependentsand deductions for charitable contributions.
1918: The maximum combined basic andsuper income tax rate reached 77%.
1922: For the first timepreferential tax treatment was provided for capital gains.
1932: The tax law was amended toprovide that US presidents were liable for federal income tax on theirsalaries. Franklin Roosevelt was the first president since Abraham Lincoln topay federal income tax on his presidential salary.
1935: The Social Security tax, 1% onthe first $3000 of wages, was enacted.
1941: Tax tables for low-incometaxpayers were introduced, simplifying the calculation of tax liability.
1942-1945: New tax laws, in responseto the cost of World War 2, created withholding on wages, more tax brackets forlower income taxpayers, the standard deduction, a personal exemption fordependents, a deduction for medical expenses, and increased tax rates. By theend of the war the maximum tax rate was 94%.
1953: The Bureau of Internal Revenuebecomes the Internal Revenue Service. And Robert D Flach, who would eventuallybecome the internet's WANDERING TAX PRO, is born.
1954: Congress completely revisedthe Tax Code, changing rates, redefining Adjusted Gross Income, and addingcredits for retirement income and dividends and new itemized deductions.
1961: Taxpayers were required toprovide their Social Security or other taxpayer identification number to banksand other financial institutions so they could report interest and dividendpayments to the IRS.
1964: Tax rates were reduced from arange of from 20% to 94% to from 16% to 77%. The Income Averaging method of taxcomputation was introduced.
1970: Congress created a Minimum Taxso high-income individuals could not completely avoid paying taxes through theuse of preferential tax shelters, loopholes and deductions.
1972: Robert D Flach, who wouldlater become the internet's WANDERING TAX PRO, prepares his first Form 1040 asa paid preparer.
1974: Congress created thedeductible Individual Retirement Account (IRA) for taxpayers not covered byemployer pension plans.
1975: Low-income taxpayers wereallowed to claim a refundable Earned Income Credit (EIC).
1979: Unemployment compensation wasmade partially taxable.
1981: Tax legislation reduced taxrates by 25% over 3 years, indexed tax brackets for inflation, and applied thesame tax rates to earned and unearned income.
1984: For the first time recipientsof Social Security and Railroad Retirement benefits were subject to tax on upto 50% of the benefits received, depending on the recipient's income.
1986: The largest revision of theTax Code since 1954, the Tax Reform Act of 1986, was enacted. The law reducedthe number of tax brackets from 14 to 2, decreased the maximum tax rate from50% to 28%, repealed the dividend exclusion, Income Averaging, the itemizeddeduction for sales tax paid and the preferential treatment of long-termcapital gains, introduced the passive activity rules, the Kiddie Tax, thededuction from gross income for health insurance premiums paid by self-employedindividuals, and the 2% of AGI limitation on most miscellaneous itemizeddeductions, phased out the itemized deduction for personal (credit card, autoloan, etc.) interest, limited the deduction for business meals andentertainment to 80%, and replaced the additional personal exemption s for age65 and blind with an increased standard deduction.
1987: For the first time taxpayerswere required to list the Social Security number of dependent children, age 5and over.
1990: The Revenue Reconciliation Actof 1990 added a third tax bracket (31%) and instituted the reduction ofitemized deductions and phase-out of personal exemptions for high-incometaxpayers.
1993: The Omnibus BudgetReconciliation Act added the 36% and 39.6% tax brackets, increased the maximumtax on Social Security benefits from 50% to 85%, and reduced the deduction forbusiness meals and entertaining from 80% to 50%.
1998: In response to abusive treatmentof taxpayers by the Internal Revenue Service, the IRS Reform and RestructuringAct of 1998 was enacted.
2001: Congress passed the EconomicGrowth and Tax Relief Reconciliation Act of 2001, the largest tax cut in over20 years, with 85 major provisions. All provisions of this act will expire in2011. And Robert D Flach begins publishing THE WANDERING TAX PRO blog.
2003: To stimulate the economy,Congress passed the Jobs and Growth Tax Relief Reconciliation Act of 2003, thethird major tax bill in as many years, and the third largest tax cut inhistory.
TTFN
Hiç yorum yok:
Yorum Gönder