Happy Birthday, Income Tax!

Posted on Oct 16, 2013

The income tax in America turned 100 years old on October 3, 2013.  Happy Birthday, right?  What better way for the company in charge of administering the income tax (the IRS, that is) to celebrate this birthday?  Its employees stayed home, of course!  Well, most of them did anyway, due to the government shutdown.

Did you know that back in 1913, when the income tax came into being, the tax was an across the board 1% of net income for most Americans, if they paid any at all?  Back then, you could deduct interest on personal debts, state and local taxes paid.  The Standard deduction was $3,000 for single filers and $4,000 for joint returns.  This resulted in 99% of Americans paying nothing in taxes.  Those that did have to file only had to wrestle with a 3 page return with 20 instructions that fit on one page.  To put this in perspective, 2012's full 1040 instructional BOOK is a whopping 214 pages!

Is this progress?  Call me at 888-9-TAX-HELP on Sundays at 1:00 p.m. and 4:00 CST and tell me what you think during my LIVE weekly radio broadcast of Your IRS Weapon airing on 1000AM in Oklahoma City and 740AM in Tulsa.

Travis Watkins
Senior Tax Attorney