TH*NK*NG (TAXES)
by Fred Cederholm
Economic Analysis Column
Columnist, Baltimore Chronicle & Sentinel
April 13, 2009
"... Presently, “tax independence day” is now July 3rd. For those working for a wage, all income earned up until July 3rd is paid to some taxing entity in one form of tax levy, or another. This equates to roughly 51% of wages! Our founding fathers would be appalled by this reality of 2009. They revolted in 1776 for far less than that! True, we now have taxation WITH representation; but do elected officials truly honor our wishes on the taxes they require us to pay? I sincerely doubt it.
In preparation for this column, I did a brief review of US income tax history. It was a real eye opener. The first income tax was levied in 1862 to underwrite the so-called HUGE costs of the Civil War. This relatively miniscule levy of 1% on incomes over $800 wasn’t permanent and was repealed in 1872. A later tax enacted in 1894 was deemed unconstitutional in 1895 because it was not apportioned to the population of each state. The 16th Amendment was drafted to remedy the constitutional contradiction and became law when ratified by the 36th state (Wyoming) in 1913.
Initially, those meeting that taxable hurdle by having a net income exceeding $3,000 paid 1% while those who made over $500,000 - regarded as a criminally obscene amount of income in 1913 - paid 6%. If that still held true using some fast and dirty computational roll forwards (given that the dollar has lost 97% of its purchasing power) those now earning in excess of $16.6 MILLION would pay $1 MILLION – not the roughly $5,785,000 that they would owe using the current 2008 tax computation worksheet. Such may not be a fair (or valid) comparison because the limited tax law of 1913 is a far cry from the thousands of pages of today’s tax code. What we have here now can only be characterized by the words “a crime against humanity - an abomination!” ..."
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