Earned Income Tax Credit (EITC) Information

How to Pay Zero Taxes by Jeff A. Schnepper

Fully updated to include all the latest tax law changes, How to Pay Zero Taxes outlines the easiest, most practical strategies you can use to lower your taxes this year, next year, and beyond. From converting personal expenses into business expenses to avoiding or surviving an IRS audit, Jeff Schnepper's guide comprehensively covers more deductions than any other tax book, all conveniently organized in six fast-access categories: exclusions, credits, “above-the-line” deductions, “below-the-line” deductions, traditional tax shelters, and supertax shelters.

Jeff A. Schnepper is the author of several books on finance and taxation, including How to Pay Zero Estate Taxes and all twenty-four previous editions of How to Pay Zero Taxes. He is a financial, tax, and legal advisor to the Transamerica sales force and runs a full-time accounting and legal practice in Cherry Hill, New Jersey. Mr. Schnepper is Microsoft's MSN MONEY tax expert, an economics editor for USA Today and is tax counsel for Haran, Watson & Company.

     

Earned Income Tax Credit (EITC) Information - History Of Tax

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Earned Income Tax Credit (EITC) Information * History Of Tax

A History of the Income Tax in the U.S.   
Garry Gamber

After the United States declared its independence and fought the Revolutionary War, the U.S. Congress relied on excise taxes on alcohol, tobacco and a few other products for revenue to pay off its war debts.

These taxes were not popular and led to the Whiskey Rebellion during the administration of George Washington. The U.S. instituted direct taxes on real property, estates, and slaves, taxes which Thomas Jefferson abolished in 1802. The U.S. relied solely on excise taxes for a few more years until they were repealed in 1817. At that point the U.S. had plenty of public land to sell and it relied on the sale of land and on customs duties for its revenue until the Civil War.

Article to continue below----------------------------------------------

Rally To Push For Hike To Georgia Cigarette Tax (AP Via Yahoo! Finance)
Anti-smoking advocates say they know a way to help fill Georgia's $1 billion budget shortfall: hike the tax on cigarettes by $1.

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The cost of the Civil War prompted Congress to restore the excise taxes and to impose a tax on personal income. The tax rate at that time was 3% and proved inadequate for the war needs, so Congress passed new excise taxes on a broader range of items and began taxing licenses, professions, and trades. Following the Civil War the need for revenue declined and Congress abolished the income tax in 1872. For the next 30 years nearly all revenue was collected from the various excise taxes.


Congress passed a flat rate income tax of 2% in 1894, but the Supreme Court ruled that the new tax was a direct tax and that it was not apportioned according to each state's population, as required by Article 1 of the Constitution. The Spanish-American War forced the U.S. to increase tariffs and excise taxes, but it was vigorously debated that the U.S. could not continue to sustain itself with high tariffs and excise taxes and that those taxes were disproportionately burdensome to the less affluent.

Article to continue below----------------------------------------------

Tax Season Brings Out The Fraud Artists (ABC News)
Tax season is a popular time for identity-theft scams. Identity theft - Theft - Crime - Fraud - Law
U.S. Sales Tax Rates Hit Record High (Forbes)
Shopping blues: Top tax 12%. Chicago's 10.25% highest big-city rate. More Internet tax fights loom.

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The ensuing debates about excise taxes, tariffs, property taxes, and income taxes led to the 16th Amendment to the Constitution in 1909 which allowed the Federal government to levy a tax on individual lawful incomes. The amendment clarified the earlier Supreme Court ruling by essentially saying that the tax on income was not a direct tax and that it could be levied without regard to the population of each State. Ironically, the amendment was proposed by conservatives in Congress who believed that the amendment would never be ratified and who hoped that the failed amendment would defeat the idea of a tax on income forever. However, in 1913 the amendment was ratified by 36 of the 48 States, the necessary three-fourths majority, and then ratified by 6 more States.


The new income tax law passed by Congress established tax rates of 1% to 7% and included generous exemptions and deductions. As a result, only 1% of the population paid income tax during the first year following the passage of the tax law.


When the U.S. entered into World War I the need for revenue greatly increased. Over the next few years the tax on incomes was increased several times, starting with the 1916 Revenue Act. The War Revenue Act of 1917 reduced exemptions and raised the tax rate again. The 1918 tax act raised the bottom tax rate to 6% and the upper rate to 77%.


Since the end of World War I the tax rate has changed many times, reflecting the needs of the Federal government at the time of the change. For example, during the prosperity of the 1920's, the tax rate was reduced to a minimum rate of 1% and a maximum rate of 25%. As the United States' economy has grown in strength and the Federal government has grown in size, the income tax has become an increasingly important segment of the government's revenue. As a result, tax laws and the tax code have been revised and refined constantly in an effort to meet the changing revenue needs of the Federal government.



Garry Gamber is a public school teacher and entrepreneur. He writes articles about politics, real estate, home businesses, poetry, and books. He is the owner of Good Politics Radio Alaska and a BookWise information lens on Squidoo.

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Index of Articles about Taxes

What Other Authors say about Taxes

Tax Credit for Going Solar by Rick Chapo

As we sit in the middle of winter, most people can't believe how high their utility bills are. Going with solar energy can lower your bills and you get a hefty tax creditSolar Tax CreditSolar energy is...

Advice on Internal Revenue Service Audits by Roni Deutch

It is important to keep in mind that the IRS computer system selects the returns that are audited, not human employees. The computer system selects returns that are likely to yield the most money to the...

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Now, here's a real tax savings to the individual taxpayer with dependents. The child tax credit is a direct federal income tax credit based on the number of dependent children in your family. This federal...

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Hit a big one? With more and more gambling establishments, keep in mind the IRS requires people to report all gambling winnings as income on their tax return.Gambling income includes, but is not limited...

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The County Tax Collector is as independent government agency and is elected for a four-year term in the Presidential election year. It is essential that a County Tax Collector is independent to ensure...

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Now, here's a real savings to the individual taxpayer with children. The child tax credit is a direct tax credit that is available to provide credit to taxpayers with income below certain established levels....

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They say that the only things certain in life are death and taxes. Since we are all faced with filing our taxes year after year, it is pretty unavoidable. If you can afford to have a Certified Public...

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The month of April rolls around and most of America is getting ready to prepare their income tax returns.Every year everyone who made an income are required to report income to the federal and state governments...

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Unclaimed Tax Refunds: How To Claim Yours by Gray Rollins

When a taxpayer owes money on their taxes they need to pay the amount owed before the traditional April 15th deadline. If the amount owed on taxes is not paid before the deadline, then federal and state...