Deadlines? Don't you hate them? Wednesday is one of the biggest deadlines of the year for taxpayers. It's when Uncle Sam orders you to turn over a large portion of the money you earned so he can stuff his pockets with it and give it away to whomever he chooses.
This has been going on in the U.S. since 1913, thanks to the ratification of the 16th Amendment. Back then, its supporters claimed only the rich would pay the tax. The top tax rate was originally set at 7 percent. It applied only to people earning more than $300,000 — the equivalent of $7.5 million of today's dollars.
My, how things have changed.
Now the government raises more than $700 billion from income taxes — 14 times more, in real dollars, than in 1913. And it's no longer just for the rich — we all get to pay! That adds up to more than 100 million tax returns filed each year.
The median income family — mom, dad, two children — pays more than $5,000 in income taxes, or more than 14 percent of its income. When you include Social Security, Medicare, sales and other taxes, about 40 cents of every dollar goes to the government.
Here are some more tax highlights (perhaps lowlights is a better word) for you to ponder:
• For the median family, taxes are a larger expense than housing, food and clothing combined.
• The top 10 percent of income earners paid 70 percent of federal income tax. The bottom 50 percent paid 3.1 percent.
• According to the Tax Foundation, it costs us $200 billion a year just to comply with the tax code.
• Presidents Kennedy and Reagan gave us significant tax relief. But after reaching a post-war low of 28 percent, the top tax rate, thanks to Bill Clinton and Bush No. 1, is now back to 35 percent and increases to 39.6 percent in 2010. Today's bottom tax rate — 10 percent — is nearly double the rate paid by the rich in 1913.
• The IRS has 114,000 employees. It is twice as big as the CIA and five times the size of the FBI.
• When the income tax first took effect it had 170 pages of laws and regulations. Today, the tax code has 17,000 pages, along with hundreds of thousands of pages of court decisions. The 1986 tax act was aimed at simplification. It ended up amending 2,000 sections of the code and creating more than 100 new forms.
Have a happy tax day.