A Brief, Government Greed History Of The U.S. Federal Income Tax

Posted: 11/4/2017

Trigger & Motivation

Just recently, I learnt that there was an incredibly high top federal income tax rate of more than 60% as far back as in the early 1930s (What during the Depression?). I remembered there were other times of extremely high income tax rates since the Depression. Then there was a period where the popular narrative has it that the so called super rich (incomes of over $200,000 in 1969) did not pay any federal income taxes and as a consequence, the alternative minimum tax (AMT) was introduced. And much more ...

Is it possible that even the U.S. had significant periods of expropriatory taxes in its history? This would be truly shocking.

The Beginnings

“The origin of the income tax on individuals is generally cited as the passage of the 16th Amendment, passed by Congress on July 2, 1909, and ratified February 3, 1913; however, its history actually goes back even further. During the Civil War Congress passed the Revenue Act of 1861 which included a tax on personal incomes to help pay war expenses. The tax was repealed ten years later. However, in 1894 Congress enacted a flat rate Federal income tax, which was ruled unconstitutional the following year by the U.S. Supreme Court because it was a direct tax not apportioned according to the population of each state. The 16th amendment, ratified in 1913, removed this objection by allowing the Federal government to tax the income of individuals without regard to the population of each State.” (Source 3)

The U.S. Congress enacted an income tax in October 1913 as part of the Revenue Act of 1913.

A Shocking And Sordid History Of Greedy Politicians

Following table shows major changes to the federal income tax code from 1913 to 2013:

	Lowest		Highest
Income Year	Tax Rate	Bracket	Tax Rate	Bracket	Max No. Of Brackets	Notes
2013	10%	<= $0 - $8,925	39.6%	> $388,350	7	Barack Obama
2012	10%	<= $0 - $8,700	35%	> $388,350	6
2004	10%	<= $0 - $7,150	35%	> $319,100	6
2003	10%	<= $0 - $7,000	35%	> $311,950	6
2002	10%	<= $0 - $10,000	38.6%	> $307,050	6
2001	15%	<= $0 - $22,600	39.1%	> $297,350	5	George W. Bush
2000	15%	<= $0 - $21,925	39.6%	> $288,350	5
1997	15%	<= $0 - $20,600	39.6%	> $271,050	5
1996	15%	<= $0 - $20,050	39.6%	> $263,750	5
1995	15%	<= $0 - $19,500	39.6%	> $256,500	5
1994	15%	<= $0 - $19,000	39.6%	> $250,000	5
1993	15%	<= $0 - $18,450	39.6%	> $250,000	5	William Clinton
1992	15%	<= $0 - $17,900	31%	> $51,900	3
1991	15%	<= $0 - $17,000	31%	> $49,300	3	Confiscatory again! George H. W. Bush
1990	15%	<= $0 - $16,225	28%	> $19,450	2
1989	15%	<= $0 - $15,475	28%	> $18,550	2
1988	15%	<= $0 - $14,875	28%	> $17,800	2	Hurrah! Best of times have finally returned
1987	11%	<= $0 - $1,500	38.5%	> $54,000	5
1986	0%	<= $1,835	50%	> $88,270	16
1985	0%	<= $1,700	50%	> $85,130	16
1984	0%	<= $1,700	50%	> $81,800	16
1983	0%	<= $1,700	50%	> $55,300	16
1982	0%	<= $1,700	50%	> $41,500	14	Ronald Reagan
1979	0%	<= $1,700	70%	> $108,300	17	Single taxpayer
1978	0%	<= $1,600	70%	> $182,200	34
1977	0%	<= $1,700	70%	> $182,000	34	Jimmy Carter
1965	14%	$0 - $1,000	70%	> $180,000	33
1964	16%	$0 - $1,000	77%	> $200,000	36	John F. Kennedy & Lyndon B. Johnson
1955	22%	$0 - $2,000	91%	> $300,000	26
1954	22%	$0 - $2,000	91%	> $200,000	26
1953	22.2%	$0 - $2,000	92%	> $200,000	26
1952	22.0%	$0 - $2,000	91%	> $200,000	26
1951	20.4%	$0 - $2,000	91%	> $200,000	24
1946	20%	$0 - $2,000	91%	> $200,000	24	Harry Truman
1944	23%	$0 - $2,000	94%	> $200,000	24	World War II. Absolutely insane
1942	19%	$0 - $2,000	88%	> $200,000	24	World War II
1941	10%	$0 - $2,000	81%	> $5,000,000	32	World War II
1936	4%	$0 - $4,000	79%	> $5,000,000	33	Franklin D. Roosevelt
1932	4%	$0 - $4,000	63%	> $1,000,000	55	Herbert Hoover
1925	1.5%	$0 - $4,000	25%	> $100,000	23	Calvin Coolidge & Andrew Mellon
1924	2%	$0 - $4,000	46%	> $500,000	45
1919	4%	$0 - $4,000	73%	> $1,000,000	57
1918	6%	$0 - $4,000	77%	> $1,000,000	56
1917	2%	$0 - $2,000	67%	> $2,000,0000	21	World War I. Woodrow Wilson
1916	2%	$0 - $20,000	15%	> $2,000,0000	16
1913	1%	$0 - $20,000	7%	> $500,000	7

Legend:

1. The data focus on lowest and highest brackets irrespective of the how taxpayers were classified by tax code (e.g. married couple filing joint returns or head of household etc.)
2. Focus is here is on single taxpayer rates after they were first introduced with income year 1971
3. Before income year 1971, focus is on head of household taxes. Head of household was introduced with income year 1952

Some Lessons Learnt

1. The U.S. was for most of the years since 1913 a highly socialist country as supported by the historical data of the U.S. federal income taxes. For the land of the free, this is absolutely shocking. That the American people have put up with this without rebellion is incredible. Where was the tea party long ago?
2. Urgently needed Constitutional Amendments:
1. No tax rate of any major single tax or any combination of major taxes (e.g. sales & income, state and federal etc.) should be allowed to exceed 30%
2. Minor taxes should be prohibited (e.g. so called sin taxes, fuel taxes etc.)
3. There were only two presidents since 1913 who dared and succeeded in reversing this highly socialist taxation regime: Calvin Coolidge & Ronald Reagan. Both presidents were awarded with incredible economic booms
4. The magnificence of the Reagan Revolution becomes even more apparent when looking at the above table
5. A great tax reform would be a flat rate federal income tax of only 10% for every income and tax payer
6. The extraordinary preferential treatment of married couples filing jointly has been outrageous compared to e.g. single taxpayers. The category of married couples filing jointly should have never been introduced in the tax code! When majorities rule, injustice happens!

Sources:

1. https://files.taxfoundation.org/legacy/docs/fed_individual_rate_history_nominal.pdf
2. https://taxfoundation.org/backgrounder-individual-alternative-minimum-tax-amt/
3. https://www.loc.gov/rr/business/hottopic/irs_history.html

Notable Quotes By Calvin Coolidge

Posted: 11/4/2017

Introduction

This will be a work in progress! Emphasis added to quotes!

I will try to comment his quotes whenever and to provide reasonable source information.

Notable Quotes

“... After all, the chief business of the American people is business. They are profoundly concerned with producing, buying, selling, investing and prospering in the world. I am strongly of opinion that the great majority of people will always find these are moving impulses of our life. ...”

The Press Under a Free Government (1925)

Address before the American Society of Newspaper Editors in Washington (17 January 1925)

[Perhaps the most famous quote by Calvin Coolidge!]

“Men do not make laws. They do but discover them. Laws must be justified by something more than the will of the majority. They must rest on the eternal foundation of righteousness.”

Have Faith in Massachusetts p. 4
[Western democracy is in a deep crisis. Urgent reforms are needed. Way too many laws and way too many lousy laws were passed by our elected representatives over the decades. Pruning of the man made laws in a sense of Coolidge is of highest priority and essence!]

“Looking back only a few years, we appreciate how rapid has been the progress of the colored people on this continent. Emancipation brought them the opportunity of which they have availed themselves. It has been calculated that in the first year following the acceptance of their status as a free people, there were approximately 4,000,000 members of the race in this country, and that among these only 12,000 were the owners of their homes; only 20,000 among them conducted their own farms, and the aggregate wealth of these 4,000,000 people hardly exceeded $20,000,000. In a little over a half century since, the number of business enterprises operated by colored people had grown to near 50,000, while the wealth of the Negro community has grown to more than $1,100,000,000. And these figures convey a most inadequate suggestion of the material progress. The 2,000 business enterprises which were in the hands of colored people immediately following emancipation were almost without exception small and rudimentary. Among the 50,000 business operations now in the hands of colored people may be found every type of present-day affairs. There are more than 70 banks conducted by thoroughly competent colored businessmen. More than 80 percent of all American Negroes are now able to read and write. When they achieved their freedom not 10 percent were literate. There are nearly 2,000,000 Negro pupils in the public schools; well-nigh 40,000 Negro teachers are listed, more than 3,000 following their profession in normal schools and colleges. The list of educational institutions devoting themselves to the race includes 50 colleges, 13 colleges for women, 26 theological schools, a standard school of law, and 2 high-grade institutions of medicine. Through the work of these institutions the Negro race is equipping men and women from its own ranks to provide its leadership in business, the professions, in all relations of life.”

The Progress of a People (1924). Commencement address at Howard University (6 June 1924), Washington, D.C

[The Democratic Party and collaborating Republicans thoroughly destroyed this truly amazing progress beginning with the horrible most socialist of all presidents President Franklin Delano Roosevelt, followed by Lyndon B. Johnson’s Great Society dystopia etc.]

“Nothing is more likely to produce that public confidence which is the forerunner and the mainstay of prosperity, encourage and enlarge business opportunity with ample opportunity for employment at good wages, provide a larger market for agricultural products, and put our country in a stronger position to be able to meet the world competition in trade, than a continuing policy of economy. Of course necessary costs must be met, proper functions of the Government performed, and constant investments for capital account and reproductive effort must be carried on by our various departments. But the people must know that their Government is placing upon them no unnecessary burden.”

Second State of the Union Address (1924)

[The business of America is business. Keep government out!]

“The country is now feeling the direct stimulus which came from the passage of the last revenue bill, and under the assurance of a reasonable system of taxation there is every prospect of an era of prosperity of unprecedented proportions. But it would be idle to expect any such results unless business can continue free from excess profits taxation and be accorded a system of surtaxes at rates which have for their object not the punishment of success or the discouragement of business, but the production of the greatest amount of revenue from large incomes. I am convinced that the larger incomes of the country would actually yield more revenue to the Government if the basis of taxation were scientifically revised downward. Moreover the effect of the present method of this taxation is to increase the cost of interest. on productive enterprise and to increase the burden of rent. It is altogether likely that such reduction would so encourage and stimulate investment that it would firmly establish our country in the economic leadership of the world.”

Second State of the Union Address (1924)

[Truly amazing what Coolidge had to say on tax reform! Coolidge predates Arthur Laffer and his curve by decades!]

Sources

1. https://coolidgefoundation.org/quote/quotations/
2. https://en.wikiquote.org/wiki/Calvin_Coolidge

Hard Rock By Joseph Haydn

Posted: 11/4/2017

Symphony No. 78 In C Minor

Listen e.g. to Symphony No. 78 In C Minor (Hoboken 1/78, completed 1782), subtract some of the slow or silent passages, play the music 25% faster and voila you got instrumental hard rock at its best, just 200 years earlier! :-)

Not only that, Haydn wrote this Symphony in preparation of a trip to London where he became on of the rockstars of the era. It is also said that the famous German Sturm und Drang influenced his composition of this Symphony. I sure agree with latter! :-)