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History of Income Tax in the USA, the last 100 yrs

Americans for Tax Reform has published some facts about the income tax. Among the statistics, the initial top tax bracket was just 7%, it did not kick in until income reached $11.6-M in Y 2013 USDs.

Only 358,000 people had to fill out 1040 forms in the beginning, as the standard family deduction was an adjusted $93,000.

Over the last 100 yrs, the US tax code has grown from 400 pgs to about 74,000 pgs.

The top rate now is 39.6%, add state and local taxes, and the government over 50% of every marginal “buck” earned.

The top bracket now is on those who earn over $450-K, which is the new functional definition of Millionaire in the USA.

Every new tax, from the income tax itself, to the Alternative Minimum Tax and the Buffett Rule is rolled out as a small levy on the vast wealth of millionaires.

The AMT was only supposed to affect a couple of hundred people when it was implemented in Y 1969, but now it is about to include 50-M taxpayers, if it’s not fixed.

In the early years of the income tax, Americans were assured that it would only take a few dollars from the wealthy among them.

Allowing the government to siphon American’s income has fueled amazing government growth.

That 1st small tax levy brought in a paltry $16.6-M in revenue, adjusted for 100 yrs of inflation. Today the income tax brings in $2.7-T. Government grows to fill, and exceed, the space made available to it.

To many the biggest problem with the income tax is the way it is collected.

We were reminded of this during the tiff over Mitt Romney’s campaign remarks about the 47%, the progressive tax system has moved an increasingly large group of Americans out of the system entirely, while placing an ever-greater share of the burden upon a dwindling group of high wage earners.

And this group is always accused of greed and refusing to pay its fair share, even though the relationship between its tax burden and the amount of income it earns has exceeded any definition of fairness.

Even before the new Obama tax increases kicked in, the Heritage Foundation noted that the Top 10% of income earners were carrying 71% of the federal income tax burden, though they earned just 43% of all income. The bottom 50% on the other hand earned 13% of all income but paid only 2% of the income tax.