Raleigh NC Accountant

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

So, what went wrong with taxes in the US?

US tax makers have been collecting what they have been sowing for quite a while. Our honor system has been replaced by a system in which all taxpayers are under surveillance because of the heavy inclination of evading their taxes. Basically, compulsion has replaced consent. Honor has been replaced with espionage. If you’re feeling the pressure with today’s taxes, call a Cary NC CPA for all your tax-related needs!

In the mid-20th century, there was not a bank in the US that informed the IRS about customer affairs, interest was not reported, withdrawals of money weren’t reported, and not a thing that went through any account was photographed. In addition to this, real estate transactions were not reported, stock transactions weren’t reported, dividends weren’t reported, income from other sources (Form 1099) was not reported, and US Customs did not require a declaration of the amount of money carried. Go here if you want help from a modern-day Tax Preparation in Cary, NC.

It was an honor system, and it functioned quite well. The deterioration that happened over the previous fifty years to now is that everything of any fiscal significance is now reported.

Adam Smith stated that taxes will be evaded and tax laws shown little credence when there is a general suspicion of a lot of unnecessary expense and great misapplication of the public revenue. For example, $500 toliet seats, high-dollar grants to study the sex lives of ants, etc.

Because the government wanted to catch a few tax resisters and evaders in the 1950s Congress made a tax abomination of the US tax system that more and more taxpayers try to bypass. As a general rule, widespread tax evasion is a sure sign that a government’s tax system isn’t working. Citizens will pay taxes, even income taxes, if the rates are reasonable.

Thanks for reading! Stay tuned for more updates!

http://www.marccpa.com/

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!

http://www.marccpa.com/

Raleigh NC Tax Preparation

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

Between 1868 to 1913, about 90% of the national government’s revenue was gotten from tax on whiskey and tobacco. While the Civil War was going on the government instituted a short income tax, but it was not until 1913 when the sixteenth Amendment was passed and enabled Congress to tax incomes “from whatever sources attained.” The initial 1040’s were due on March 1, 1914. There wasn’t any money withheld from paychecks and no money was sent away with the return. Every taxpayer’s computations were calculated by IRS field agents and a bill sent to the taxpayer on June 1st.

1766 – Leaders of the colonies got together to protest British taxes under the Stamp Act. This Stamp Act Congress, which it was called, was the beginning of the American independence movement and the beginning of the modern U.S.

1782 – The first Congress under the Articles of Confederation formed. This Congress did not have any powers of taxation.

1789 – America granted a newly formed Congress the ability to tax. Without taxing powers, the initial Congress of the United States scantly survived 7 years before being dubbed a failed attempt; the 2nd Congress, with taxation powers, is still functioning after more than two hundred years. 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!

1792 – Alexander Hamilton persuades Congress to pass an excise tax on whiskey to raise revenue and curb drinking. In the western frontier whiskey was the basic mode of exchange, and the 25% tax was harsh. By 1794 the region was openly in revolt. The forerunner of the IRS was created to enforce the tax. Go here if you want help from a modern-day CPA firm in Raleigh, NC.

1832 – The national debt that remained after the Revolutionary War and the War of 1812 is paid off. The South does not see any reason for continued high import taxes that increase the price on goods for Southern consumers and promote industrial monopolies in the North.

1850 – John C. Calhoun of South Carolina warns Congress that the South could leave the Union due to the fact that the overly oppressive taxation in the South raised funds that ended up in the North, causing a massive shift in money from the South to the North.

Stay tuned for Parts 2 and 3 of the Timeline of US Tax Policy!

http://www.marccpa.com/