ASK & RECEIVE

There’s quite a few people who have been listening to a familiar message. The message from Washington politico wanna be’s . . . You should be getting more benefits. . . but not paying a lot more taxes.

taxes_coming_to_you_2This is an old message for people who have heard the Pied Piper calling, it’s about government and how much to pay in taxes. There are numerous ways to deliver the message but it’s always about finding new ways to extract more money from your pocket book while not seeming to be the money grabbing, pocket thieves, that they really are.

Actually it’s not so much about money, it’s about power and the influence & manipulation of people, through it’s gathering and distribution. Amazingly, even though the practice of government gaining power through taxes, rather than conquering, looting & plunder, is thousands of years old, the use of force in obtaining it is about the same. There isn’t an insanity plea that can be raised in a court of law should you not pay your share.

The roots of IRS go back to the Civil War when President Lincoln and Congress, in 1862, created the position of commissioner of Internal Revenue and enacted an income tax to pay war expenses. The income tax was repealed 10 years later. Congress revived the income tax in 1894, but the Supreme Court ruled it unconstitutional the following year.

The shift toward income tax and away from property & estate tax as the major source of government revenue began in the 1920s and ’30s which saw the creation of multiple taxes. The 16th amendment to the constitution regarding income taxation in the U.S. was ratified in 1913. Here are a few other facts about taxes which you may find interesting.

  • Federal tax has increased by a multiple of 27 since 1960 (Tax Payers Union data 2012)
  • Tax payers have spent 3.8 billion hours complying with tax laws (Tax Payers Union data 2009)
  • In 1978 the alternative minimum tax (AMT), a type of federal income tax, was enacted. It uses a separate set of rules to calculate taxable income after allowed deductions. It was designed to prevent taxpayers from avoiding their “fair share” of taxes. It’s not indexed to inflation, and more taxpayers have become subjected to it.
  • In fiscal year 2010, the government collected $2.4 trillion in tax revenue, but spent $3.5 trillion. The gap between revenue and spending is known as the budget deficit. The total money the federal government borrows through the years to cover the accumulated budget deficit is the national debt.
  • In 2013, the US government spent over $3.5 trillion, of which $700 billion was borrowed, which in total equates to 21% of our Gross Domestic Product (GDP). The top 5 major spending categories are:
  1. Social Security (24%)
  2. Medicare, Medicaid, Children’s Health Insurance (22%)
  3. Defense and International Security (19%)
  4. Safety Net Programs (12%)
  5. Retirement for Federal Employees and Veterans (8%)
  6. Interest on debt (6%)
  7. Transportation & infrastructure (3%)
  8. Science & medical research (2%)
  9. Education (1%)
  10. International (non-security) (1%)
  11. All other categories (2%)

IRS_revenue_graphic_1

Tax freedom day for 2016 is April 24th. That’s the day calculated when American taxpayers have completed their annual tax obligations. Some states are a little earlier, while others may take a few more days of work to meet the tax burden.

Have a wonderful time calculating, tabulating, and typing in all that tax information. Most states require you to electronically submit or mail your tax obligation by midnight April 15. The IRS says for this year, you must submit by April 18.

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