Thursday, October 3, 2013
New York Times: Happy Centennial, Federal Income Tax, by Bruce Bartlett:
Thursday, Oct. 3, is the 100th anniversary of the federal income tax. That is the day that President Woodrow Wilson signed the legislation into law in 1913, concluding a process begun four years earlier by President William Howard Taft. ...
The new tax applied only to those with very high incomes. There was a personal exemption of $3,000 for individuals (equivalent to $71,000 today) and $4,000 for married couples (about $94,500 today) but none for dependents. Additionally, all interest and state and local taxes were deductible. After that, the following rate schedule applied to both individuals and couples.
It was estimated that only 425,000 people in a population of more than 97 million would owe any income tax. ...
Today, the income tax of 1913 is still with us and is likely always to be despite quixotic efforts to abolish it. We will be wishing it many happy anniversaries to come.