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Thursday, April 10, 2008

As tax day approaches

For your perusal, the original tax rates from 1913 and as compared to 2005 dollars
And these are tax rates that people today would fight and die for.

Figure 1:1913 Personal Income Tax System

Figure 2:1913 Personal Income Tax System in 2005 Dollars

Figure 1:
Tax Rate- Income Level
1%- up to $20,000
2%- $20,000 - $50,000
3%- $50,000 - $75,000
4%- $75,000 - $100,000
5%- $100,000 - $250,000
6%- $250,000 - $500,000
7%- over $500,000

Figure 2:
1913 Tax Rates Adjusted for 2005 Dollars

Tax Rate - Income Level
1%- up to $382,189
2%- $382,198 - $955,495
3%- $955,495 - $1,433,242
4%- $1,433,242 - $1,910,990
5%- $1,910,990 - $4,299,727
6%- $4,299,727 - $9,554,950
7%- over $9,554,950

(Figure 1:A $3,000 exemption for single filers
and $4,000 for a married couple.)
(Figure 2:A $44,776 exemption for single filers
and $59,701 for a married couple.)

The original marketing campaign for the 16th Amendment was that only the rich would pay taxes. Under the old rates, this would mean that today the first $382,000 would be free from taxes. But note that even in 1913 class envy and warfare was rampant. The rich still paid taxes. And only the rich. The more you made, the more you paid as a percentage and certainly as an amount. This is in direct opposition to what the founders wanted, and with good reason. The founders wrote that taxes were to be apportioned. An example of apportioned taxes: the entire budget of the United States is about $3,000,000,000,000. The population of Minnesota is 1.7% of the total U.S. population. That would mean that Minnesota is responsible for paying 1.7% of the budget or $51,000,000,000 (which means on average every Minnesotan [not every taxpayer] would owe about $10,000). Now, how Minnesota decides to collect that amount would be up to the state legislature. But, that would also mean that people could move to a state that collect that bill in way that they thought was fair. Welcome to federalism.
We're not quite where the Founding Fathers wanted us to be.
My idea: eliminate tax withholding. Move Tax Day from April 15th to the first Monday in November. Hey, wait a minute. That would mean that within twenty-four hours of having to write a large check people would vote in the General Election. you think writing that check might impact the vote?
Happy Tax Day.


Anonymous Val de Vir said...

Right on! I'd love to see what the congressmen would do if the American people had to write a tax check every two weeks along with their utility bills, mortgages, groceries, etc. I guarantee, they'll be a lot of second guessing priorities!

12:28 AM  

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