Happy 100th Birthday, Income Tax!
On Sunday, the Sixteenth Amendment, the one that laid the groundwork for a permanent federal income tax, celebrated its 100th birthday. Needless to say, not everybody was lining up to celebrate. In Forbes, wealth manager David Marotta used the anniversary as an opportunity to exhort readers to "Let the Income Tax Die at 100." Meanwhile, over at The Global Dispatch, Robert Harriman paired anti-tax quotes from a trio of Founding Fathers with a pro-tax quote from Karl Marx.
Even the biggest fans of the income tax system are generally quick to admit that they don't really like paying taxes, and some of its most furious foes have gone so far as to claim that the Sixteenth Amendment was never actually ratified. But whether you think federal income taxes are an unconstitutional power grab or, as Ray Raphael argued in Article 3, a natural progression from the property-based tax system that existed almost since the country's founding, one thing is certain: If it weren't for the federal tax system, America would never have been able to reach its current position in the world.
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The interstate highway system that was key to America's postwar dominance? Fully 90 percent of it was funded by federal income taxes. The space exploration program that put the American flag on the moon? That money came from income taxes, too. The same goes for the standing army, the EPA, the Food and Drug Administration, and hundreds of other programs, large and small, that help keep Americans healthy, educated, and protected. And, as we've seen recently, reduced tax revenue makes it much harder to keep those programs operating.
As for all those entitlement programs that have gotten so much criticism in recent years, they're paid for through taxes as well. And, lest we wonder how Medicare and unemployment, WIC and student loan programs help keep America strong and safe, it's worth remembering that a healthy, well-educated work force is the key to keeping -- and, hopefully, strengthening -- America's place in the world.
So, while Feb. 3 may not quite rank with July 4 among our favorite days to celebrate, it's worth remembering that it's a key part of how we rose to become the most powerful nation in the world. So, without a hint of irony, here it is: Happy Income Tax Day!
And here (courtesy of our friends at Americans for Tax Reform) are a few fun facts about income taxes:
Top tax bracket in 1913: 7%
Top 1913 tax bracket threshold, in today's dollars: $11.6 million
Top 2013 tax bracket threshold: $450,000
Total number of 1040s filed in 1913: 358,000
Total number of 1040s filed today: 140 million
Total pages in the 1913 tax code: 400
Total pages today: 73,954
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Bruce Watson is a senior features writer for DailyFinance. You can reach him by e-mail at bruce.watson@teamaol.com, or follow him on Twitter at @bruce1971.
