Ask a Tax Question - History Of Tax
Tax This!: An Insider's Guide to Standing Up to the IRS
by Scott Estill

Tax This! An Insider's Guide to Standing Up to the IRS, is just that. It provides the insight of an insider that will help you stand up to the IRS in any situation. Little known facts and difficult to conceive strategies are revealed that will help any target of the IRS deal effectively with them or help prevent you from becoming their target.

Author Scott Estill discloses all the rights, which are many, that citizens have when confronted with a problem involving the IRS. He gives an insider's look at the culture, attitudes, and seemingly out of control bureaucracy that prevails inside the IRS and prepares you to deal with the IRS at that level also. His information is backed up by references to the Internal Revenue Code, Congressional Law, and established judicial decisions.

Tax This also provides clear examples of completed IRS forms, which are many and varied. Overall, this is an informative, easy read for someone like me with little knowledge of the IRS. It will hold your interest even if the IRS isn't breathing down your neck and may be invaluable if they are.

     

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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 The U.S. relied solely on excise taxes for a few more years until they were repealed in 1817.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.

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Ashland Community And Technical College Offers Fall Scholarships (The Ironton Tribune)
ASHLAND. Ky. — April 1 is the priority application deadline for fall 2010 scholarships at Ashland Community and ...

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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.

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Undergrad Scholarships For NRIs, PIOs (The Times Of India)
New Delhi has announced scholarships for the Indian diaspora for undergraduate studies in India during 2010-11.

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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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