Raleigh NC Tax Preparation

W. Marc Gilfillan, CPA, NC, individual and business CPA and Tax expert, shares about the history of taxes…

1861 – After Lincoln was elected, southerners walk out on Congress and form the Confederate States of America with a rewritten constitution to keep the new government power to tax in check.

1862 – The beginning of US income tax is created to help finance the rising massive debts of the Civil War. If you are feeling the pressure with today’s taxes, call a CPA for Tax Preparation in Raleigh, NC for all your tax-related needs!

1872 – The income tax gets struck down.

1894 – Congress creates an income tax in response to complaints that large reliance on tariffs skyrockets the costs of imports for farmers and consumers. Go here if you want help from a modern-day CPA firm in Raleigh, NC.

1895 – The US Supreme Court holds that the 1894 income tax law conflicts with the US Constitution’s bars on insituting direct taxes.

1913 – Ratification of the sixteenth Amendment removes that bar and Congress establishes an income tax system.

1917 – World War I revenue requirements push up taxes, with the maximum rate jumping to seventy-seven percent in 1918.

1924 – Publication of the names of taxpayers and how much they owe fails to achieve the task of forcing paying the taxes and the practice is dropped.

1942 – Before World War II, the income threshold for filing income tax left most working people out. But the war’s cost pushed the threshold down the income ladder and sent the top rate to 94% prior to the war being over.

1943 – To force compliance from the hugely increased number of taxpayers, Congress institutes tax withholding from wages, which basically turned employers into tax collectors.

In the 1940s Justice Jackson of the Supreme Court, former chief counsel to the IRS, gloated about how honest Americans were in reporting their income taxes. It was an honor system – there were very few informational returns. Open resistors to the taxes were few and the black market was relatively small.

1962 – IRS Commissioner Caplin stated “no other nation in the world has ever equaled this record of voluntary compliance. It is a tribute to our people, their tradition of honesty, and their high sense of responsibility in supporting our government.”

1982 – Chief Justice Neely said – “cheating on federal and state income tax is all pervasive in all classes of society; except among the compulsively honest, cheating usually occurs in direct proportion to opportunity.”

Stay tuned for Part 3 of the Timeline of US Tax Policy!

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