Paul L. Caron

Thursday, October 3, 2013

Happy 100th Anniversary, Federal Income Tax

100New 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.

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In addition to the federal income tax and the Federal Reserve, this year is also the 100th anniversary of the change in the Constitution that did away with state representation in Congress as part of the checks and balances system. Very few people seem to remember that the Constitution did not originally call for direct election of senators - they were appointed by their own state legislators so as to look out for the needs of their individual states - until 1913. Those three combined - direct election of senators, the federal income tax, and the Fed - largely sealed the fate of this once great nation.

Posted by: CB | Oct 4, 2013 9:10:17 PM