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Happy 100th Birthday, Federal Income Tax!

Contributed by mm | February 14, 2014 3:52 AM PST

As each of us are making progress in our respective tax returns, this MarketWatch article conveniently reminded us that it has been 100 years since Americans started paying federal income tax.

Many intriguing facts from the article and the slide show covering the evolution of Form 1040 over the past century. Some fascinating facts I learned by reading this article and doing some additional research:

1) The first-ever Form 1040 (of tax year 1913) was only three page long with one page instruction and no additional forms or schedules. Today: it's two pages but with 206-page instructions, not counting additional forms and schedules and their accompanying instructions.

2) Back to 100 years ago, the tax system is simple: 1% tax for the first $20,000 taxable income, and progressive tax capped at 7% for taxable income above $500,000. According to U.S. Federal Individual Income Tax Rates History, 1862-2013, compiled by Tax Foundation, the 1913 tax rate, in 2013 dollars, was 1% for the first $463,826, 2% for taxable income up till $1,159,566, and all the way up to 7% for taxable income above $11.6M. In fact, the income tax was only imposed on the top 1% wealthiest.

3) Americans in 1933 needed to deal with over 50 tax brackets with tax rates ranging from 4%, 8%, 9% and all the way up to 63% with 1% increments (with some interesting voids like 15% and 22%).

4) In 1944 and 1945, the richest Americans were paying a top marginal tax rate of 94%, assessed on taxable income over about $2.6M (in 2013 dollars).

What a century of change!

This Post Has Received 67 Comments. Share Your Opinions Too.


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2G:GSM 1800MHz,GSM 1900MHz,GSM 850MHz,GSM 900MHz|3G:WCDMA B1 2100MHz,WCDMA B5 850MHz,WCDMA B8 900MHz|4G LTE:FDD B1 2100MHz,FDD B20 800MHz,FDD B3 1800MHz,FDD B7 2600MHz,FDD B8 900MHz|Additional Features:3G, 4G, Alarm, Bluetooth, Browser, Calculator, Calendar, People, Fingerprint recognition, Fingerprint Unlocking, MP3, MP4, WiFi|Back-camera:8.0MP ( SW 13.0MP )|Battery Capacity (mAh):2850mAh|Battery Type:Non-removable|Bluetooth Version:V4.0|Brand:VKWORLD|Camera type:Dual cameras (one front one back)|Cell Phone:1|Cores:1.3GHz, Quad Core|CPU:MTK6737|English Manual :1|External Memory:TF card up to 32GB (not included)|Front camera:5.0MP ( SW 8.0MP )|Google Play Store:Yes|I/O Interface:1 x Micro SIM Card Slot, 1 x Nano SIM Card Slot, 3.5mm Audio Out Port, Micro USB Slot, Micophone, TF/Micro SD Card Slot, Speaker|Language:Chinese Simplified, Traditional Chinese, Japanese, Malay, Catalan, Danish, German, Estonian, English, Spanish, French, Croatian, Indonesian, Italian, Latvian, Lithuanian, Magyar, Dutch, Norwegian Bokm|Music format:AAC, WAV, MP3, MKA, M4A, AMR|Network type:FDD-LTE,GSM,WCDMA|OS:Android 7.0|Package size:17.50 x 9.90 x 5.30 cm / 6.89 x 3.9 x 2.09 inches|Package weight:0.3600 kg|Picture format:PNG, JPG, JPEG, GIF, BMP|Power Adapter:1|Product size:14.30 x 7.40 x 0.89 cm / 5.63 x 2.91 x 0.35 inches|Product weight:0.1650 kg|RAM:3GB RAM|ROM:32GB|Screen Protector:1|Screen resolution:1280 x 720 (HD 720)|Screen size:5.5 inch|Screen type:IPS, Corning Gorilla Glass|Sensor:Gravity Sensor,Proximity Sensor|Service Provider:Unlocked|Silicone Case:1|SIM Card Slot:Dual Standby, Dual SIM|SIM Card Type:Nano SIM Card, Micro SIM Card|SIM Needle:1|Type:4G Phablet|USB Cable:1|Video format:RMVB, AVI, FLV, MKV, WMV, MP4|Video recording:Yes|WIFI:802.11b/g/n wireless internet|Wireless Connectivity:3G, 4G, Bluetooth, GPS, WiFi

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216900301
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