paulitician
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By Ryan Ellis
On February 3, 2013, taxpayers will celebrate a very dubious centennial: the 100th anniversary of the Sixteenth Amendments ratification. The Sixteenth Amendment gives Congress the power to levy income taxes.
We can derive a couple of lessons from this somber occasion.
First, taxes which are foisted upon us by politicians with the promise that they will only be assessed on the rich will eventually fall on much of the population, including the poor.
Second, higher taxes lead to more government spending and even more and higher taxes.
Lets compare the income tax system of 1913 with todays system. (All numbers below are indexed to the consumer price index and expressed in todays dollars.)
When the Revenue Act of 1913 the first post-Sixteenth Amendment tax bill was signed into law by President Woodrow Wilson in October 1913, the top marginal income tax rate was only 7 percent. The top rate kicked in when taxable income exceeded $11.6 million.
Married couples earning less than about $93,000 faced no income taxation whatsoever. If those same exemptions were around now, approximately 90 percent of all families would be totally exempt from the income tax.
Todays top rate is not 7 percent, but a whopping 39.6 percent. Instead of the top bracket starting at $11.6 million, it begins at $450,000 for married couples. Unless youre at or near the poverty line, you likely have an income tax liability. Thats a far cry from a limited tax on the rich.
Making things worse, Congress created a parallel income tax on wages in the 1930s, ostensibly to pay for Social Security. It was later expanded in the 1960s to pay for part of Medicare. This second income tax manages to capture those few taxpayers that the first one leaves unscathed. Younger workers paying this second income tax on wages long ago gave up much hope of getting any promised benefits when they retire.
Other taxes continued to rise during this period, as well. The corporate income tax rose from a few percentage points in the early twentieth century to 35 percent today, the highest in the developed world. The death tax, another creation of the progressive eras tax geniuses, now stands at 40 percent, one of the highest rates in the developed world.
The income tax and all other taxes combined collected about $16.6 billion in 1913. In 2013, total tax revenues are expected to reach about $2.7 trillion. Remember, these statistics are in todays dollars!
This explosion in the tax power of the federal government has been associated with a century-long expansion...
Read more: The income tax: A century of bigger government | The Daily Caller
On February 3, 2013, taxpayers will celebrate a very dubious centennial: the 100th anniversary of the Sixteenth Amendments ratification. The Sixteenth Amendment gives Congress the power to levy income taxes.
We can derive a couple of lessons from this somber occasion.
First, taxes which are foisted upon us by politicians with the promise that they will only be assessed on the rich will eventually fall on much of the population, including the poor.
Second, higher taxes lead to more government spending and even more and higher taxes.
Lets compare the income tax system of 1913 with todays system. (All numbers below are indexed to the consumer price index and expressed in todays dollars.)
When the Revenue Act of 1913 the first post-Sixteenth Amendment tax bill was signed into law by President Woodrow Wilson in October 1913, the top marginal income tax rate was only 7 percent. The top rate kicked in when taxable income exceeded $11.6 million.
Married couples earning less than about $93,000 faced no income taxation whatsoever. If those same exemptions were around now, approximately 90 percent of all families would be totally exempt from the income tax.
Todays top rate is not 7 percent, but a whopping 39.6 percent. Instead of the top bracket starting at $11.6 million, it begins at $450,000 for married couples. Unless youre at or near the poverty line, you likely have an income tax liability. Thats a far cry from a limited tax on the rich.
Making things worse, Congress created a parallel income tax on wages in the 1930s, ostensibly to pay for Social Security. It was later expanded in the 1960s to pay for part of Medicare. This second income tax manages to capture those few taxpayers that the first one leaves unscathed. Younger workers paying this second income tax on wages long ago gave up much hope of getting any promised benefits when they retire.
Other taxes continued to rise during this period, as well. The corporate income tax rose from a few percentage points in the early twentieth century to 35 percent today, the highest in the developed world. The death tax, another creation of the progressive eras tax geniuses, now stands at 40 percent, one of the highest rates in the developed world.
The income tax and all other taxes combined collected about $16.6 billion in 1913. In 2013, total tax revenues are expected to reach about $2.7 trillion. Remember, these statistics are in todays dollars!
This explosion in the tax power of the federal government has been associated with a century-long expansion...
Read more: The income tax: A century of bigger government | The Daily Caller