15 February 2023

By The Numbers - part the thirty first

What with the likes of Scott and Lee leading the charge against Damn Gummint, and income taxes in particular (the kind the RRW hate to the core), it's useful to recall how it came to be. Most significantly, it required a Constitutional Amendment, the 16th.
When the federal income tax was implemented to help finance World War I in 1913, for example, the marginal tax rate was 1% on income of $0 to $20,000, 2% on income of $20,000 to $50,000, 3% on income of $50,000 to $75,000, 4% on income of $75,000 to $100,000, 5% on income of $100,000 to $250,000, 6% on income of $250,000 to $500,000, and 7% on income of $500,000 and up.
Now, that's heaviest on the riches, as is easy to see. Also, those dollar figures are closer to today's notion of gross income than today's notion of net income.

Curiously, a Civil War income tax was allowed to stand, for a while.
The Civil War taxes were not immediately repealed at the end of the war but continued in force until 1872, when the Grant administration sponsored the repeal of most of the "emergency" taxes.
and, who would pay how much?
The Civil War income tax was the first tax paid on individual incomes by residents of the United States. It was a "progressive" tax in that it initially levied a tax of 3 percent on annual incomes over $600 but less than $10,000 and a tax of 5 percent on any income over $10,000.
There were challanges:
The tax on whiskey remained in force. Between 1868 and 1881 the U.S. Supreme Court responded to challenges regarding the validity of the Civil War taxes on dividends, real estate, inheritances, and income tax by upholding the constitutionality of those taxes.
But wait, there's more
But the Supreme Court surprised the nation, reversing its earlier decision and declaring the law unconstitutional in 1895. This ruling, declaring that an income tax is a direct tax and therefore unconstitutional, led to the ratification of the sixteenth amendment in 1913.
So, that's how we got here. And it's very much worth noting that, from the beginning, these income taxes were what the RRW of today would condemn as Woke and Progressive. But, of course, that's a part of turning the calendar back to the 19th century they don't want to talk about.

No comments: