Just in case you wanted to hold a party or send the IRS a little gift, the U.S. Census Bureau reminds us that this July marks the 150th birthday of our beloved income tax. Oh, by the way, those birthday gifts are not tax deductible.
On July 1, 1862, President Abraham Lincoln, who may not have really chopped down vampires, signed a bill imposing a 3% tax on the incomes of Americans earning between $600 and $10,000 per year. People with incomes above $10,000 were taxed 5 percent.
Required mainly to pay for the Civil War, and believe-it-or-not largely unpopular, the income tax of 1862 survived only 10 years before being repealed by Congress in 1872.
Also See: History of the US Federal Income Tax
The income tax we all know and cheerfully pay or artfully dodge today was imposed in 1913, after the states ratified the 16th Amendment to the U.S. Constitution, giving Congress the power to levy such a tax.
Due largely to its mind-numbing complexity, the income tax process has evolved into an industry of its own. About 142.5 million individual tax returns are now filed annually. And since not everybody likes doing it themselves, there are nearly 112,000 tax preparation services around the nation where Americans spend at least $7 billion a year to have their taxes prepared for them, according to the Census Bureau.
Also See:
Taxpayer Advocate Slams Income Tax Complexity
Why the 'Tax Gap' Costs You Money
83 Percent of Tax Payers Pay On Time
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