The 1st attempt to inflict an income tax on Americana occurred as a
result of the War of 1812. At the end of two years of war, the federal
government owed an unbelievable $100 million of debt (in inflationary
terms, it probably had the same impact on the treasury as $100 billion
debt would today). To pay for this, the government doubled the rates of
its major source of revenue, customs duties on imports. This measure
obstruct...
The story of American income taxes begins 1812.
The 1st attempt to inflict an income tax on Americana occurred as a
result of the War of 1812. At the end of two years of war, the federal
government owed an unbelievable $100 million of debt (in inflationary
terms, it probably had the same impact on the treasury as $100 billion
debt would today). To pay for this, the government doubled the rates of
its major source of revenue, customs duties on imports. This measure
obstructed trade so severely that the government ended up bringing in
less revenue than it had received from the lower rates. It's ironic that
the American Revolution was began because of Tea Taxes in Boston.
Also, excise taxes were imposed on goods, and commodities such as
housing, slaves and land were taxed pay for the war. After the war ended
in 1816, these taxes were repealed and instead high customs duties were
passed to retire the accumulated war debt.
What is Taxable Income?
The amount of income utilized to arrive at your income tax. Taxable
income is your gross income minus all your adjustments, deductions, and
exemptions.
A few specific taxes:
Estate Taxes:
One of the oldest and widely-used forms of taxation is the taxation of
property held by an individual at the time of demise.
The US currently has Estate Taxes, although there are proposals to do
away with them.
Such a tax can take two forms of implemantation. A direct estate tax can
be levied on the estate prior to any transfer to heirs. An estate tax is
a charge upon the deceased's entire estate, regardless of how it's
disbursed. Another option form of death tax is an inheritance tax (a tax
levied on beneficiaries getting property from the estate). Taxes imposed
upon demise provide incentive to transfer assets prior to demise.
Canada no longer has Estate Taxes.
Virtually all European countries have Estate Taxes. The prime
illustration is Great Britain, where high estate taxes have effectively
ruined the financial well-being of virtually all of Britain's Nobility,
who have been forced to sell vast real estate holdings or place them in
historical trusts.
Capital Gains Taxes
Capital Gains are the increases in value of anything (including
investments or even real estate) that makes it worth more than the price
for which it was bought. The gains are likely not to be realized or even
taxed until the asset is sold.
Capital gains are ordinarily taxed at a lower rate than regular income
to promote business development or entrepreneurship during all economic
phases. This is thought to help companies invest in technology and
expand to create more employment.
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