It’s time to pay the piper.
As I begrudgingly wrote that Treasury check, I had to admit things could be worse.
In ancient Egypt, tax “masters” taxed slaves, as if being a slave wasn’t taxing enough. Ancient Romans had such a high tax burden, it brought down their empire.
England has the most beguiling tax story. In the 11th century, Lady Godiva is said to have successfully protested her husband’s (the Earl of Mercia) burdensome tax upon his subjects by riding naked on a white horse through Coventry. Beats tea in the harbor.
Across the water, the roots of the IRS date back to President Lincoln. To pay for the Civil War, he created the position of commissioner of internal revenue, and Congress enacted an income tax in 1861. Ten years later, it was repealed. In 1894 Congress tried to revive it with a flat-rate tax, but the Supreme Court ruled it unconstitutional.
The Sixteenth Amendment had the final say. In 1913 the amendment’s final ratification (by Wyoming) ensured Congress could, and thus did, enact the income tax.
The first rates in 1913 were 1 to 7 percent.
In 1918, the top rate rose to 77 percent to finance World War I (low compared to World War II’s top rate of 94 percent). By 1929 the ceiling was down to 24 percent, but rose again to 63 percent during the Great Depression.
Since the 1980s, the top rate has hovered in the 30s, historically low compared to most of the last century. Currently the highest rate is 39.6 percent, although the average taxpayer pays roughly a third to half of that rate.
While it hurts to see the cash outflow, it helps to remember what taxes pay for. Parks, roads and schools. Emergency services, defense (a lot more of it, given this week’s headlines), and law enforcement. Social Security, Medicare and low-income assistance.
In other words, most of our taxes pay for us.
“Like mothers, taxes are often misunderstood, but seldom forgotten.” — English jurist Lord Bramwell
Sholeh Patrick is a columnist for the Hagadone News Network. Contact her at Sholeh@cdapress.com.