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March 18, 2024, 11:45:50 pm
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Author Topic: 100th Birthday of The Income Tax  (Read 16221 times)
Gaspar
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« on: October 03, 2013, 01:33:54 pm »

Woodrow Wilson signed the Income Tax into law one hundred years ago today. As direct taxation of Americans was prohibited by the Constitution, a constitutional amendment was necessary before what would become the Revenue Act of 1913 could be legally imposed. The income tax, and the enabling amendment, were sold to the voters as necessary for a tax on rich people that would mean lower taxes and cheaper goods (due to lowered tariffs) for everyone else. Only one percent of the population were subject to the tax then, and the tax rate was one percent.  The voters need not worry, they were told, because regular people would never ever pay the income tax.

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nathanm
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« Reply #1 on: October 03, 2013, 05:44:21 pm »

Tell you what, let's cut the DoD's budget to the same as it was in real dollars in 1949 and we can eliminate the income tax entirely on everyone in the bottom 95% of the income distribution. It would be deficit neutral.

Yes, our military has increased its annual budget since 1949 by about the same amount as the income tax on the bottom 95% of income has been generating each year for the past few years. Eisenhower was right.
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"Labor is prior to and independent of capital. Capital is only the fruit of labor, and could never have existed if labor had not first existed. Labor is the superior of capital, and deserves much the higher consideration" --Abraham Lincoln
Conan71
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« Reply #2 on: October 03, 2013, 05:54:48 pm »

Tell you what, let's cut the DoD's budget to the same as it was in real dollars in 1949 and we can eliminate the income tax entirely on everyone in the bottom 95% of the income distribution. It would be deficit neutral.

Yes, our military has increased its annual budget since 1949 by about the same amount as the income tax on the bottom 95% of income has been generating each year for the past few years. Eisenhower was right.

And the fact you don't speak Russian or Arabic is likely owed to quite a bit of that investment in the military.  It's also been a major driver of the private sector economy as well as helping to provide many high-paying engineering jobs.  I guess we could have done without all that and everyone could have worked in shoelace factories for $1 a day.
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nathanm
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« Reply #3 on: October 03, 2013, 06:54:17 pm »

Some of it, I'm sure. That's not even the point, though. The point is that the application of income tax to everyone is largely attributable to us never getting out of the war mindset after WWII, not due to some vast socialist state.
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"Labor is prior to and independent of capital. Capital is only the fruit of labor, and could never have existed if labor had not first existed. Labor is the superior of capital, and deserves much the higher consideration" --Abraham Lincoln
TeeDub
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« Reply #4 on: October 03, 2013, 07:07:19 pm »

Tell you what, let's cut the DoD's budget to the same as it was in real dollars in 1949 and we can eliminate the income tax entirely on everyone in the bottom 95% of the income distribution. It would be deficit neutral.

Yes, our military has increased its annual budget since 1949 by about the same amount as the income tax on the bottom 95% of income has been generating each year for the past few years. Eisenhower was right.

While we're cutting let's go ahead and cut Medicare, Medic aid and Social Security to those levels as well.   
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Red Arrow
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« Reply #5 on: October 03, 2013, 07:08:10 pm »

Woodrow Wilson signed the Income Tax into law one hundred years ago today. As direct taxation of Americans was prohibited by the Constitution, a constitutional amendment was necessary before what would become the Revenue Act of 1913 could be legally imposed. The income tax, and the enabling amendment, were sold to the voters as necessary for a tax on rich people that would mean lower taxes and cheaper goods (due to lowered tariffs) for everyone else. Only one percent of the population were subject to the tax then, and the tax rate was one percent.  The voters need not worry, they were told, because regular people would never ever pay the income tax.

The regular people today making the same thing in non-adjusted dollars still don't pay federal income tax.  (I am aware that the Payroll (Social Security/Medicare) tax is on the same income but it is a different subject.)
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Red Arrow
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« Reply #6 on: October 03, 2013, 07:10:04 pm »

Some of it, I'm sure. That's not even the point, though. The point is that the application of income tax to everyone is largely attributable to us never getting out of the war mindset after WWII, not due to some vast socialist state.

I believe you underestimate the cost of social programs.
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Conan71
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« Reply #7 on: October 03, 2013, 08:12:42 pm »

Some of it, I'm sure. That's not even the point, though. The point is that the application of income tax to everyone is largely attributable to us never getting out of the war mindset after WWII, not due to some vast socialist state.

Ironic you say that since the legacy of socialist programs just barely pre-dates WWII.

We have had a "war mindset" even before the Revolutionary War if you study the various conflicts prior to 1776. Since then War of 1812, war on Indians, Mexican American War, Civil War, Spanish-American War, WWI, WWII, Korean War, Viet Nam (if not Viet Nam, it could have just as easily been Cuba), etc. ad nauseum.  It's been a part of our fabric, like it or not.  Granted, ever since WWII it's not been near as much about protecting our own sovereignty, with the arguable exception of retribution for the attacks of 9/11/01.

Let's face it, the government spends a smile-load of money, entirely too much.  Take money from defense and government will find somewhere else to spend it.  Right now we are sitting around watching politicians argue over who of their protected donors are still going to get their largesse from the treasury.  That is what the whole "shut-down" is all about.  Nothing more, nothing less.

Thinking cutting defense spending significantly will really impact the debt and deficit is like the alcoholic who finally has that moment of clarity and realizes how much money he's pissed down a urinal the last 20 years.  He quits drinking and takes up gambling because it's less harmful.
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nathanm
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« Reply #8 on: October 04, 2013, 09:16:24 am »

While we're cutting let's go ahead and cut Medicare, Medic aid and Social Security to those levels as well.   

One of those is not like the other. What do Medicare and Social Security have to do with income tax? By the way, the federal government spent less than half of what it spent on the security state on Medicaid in 2011, if you really do want to compare things that are funded from income tax. Between the wars and the normal security spending, we spent $933 billion dollars last year. That includes the $139 billion the VA spent, but not interest attributable to past borrowing for defense and homeland security. By contrast, the entirety of the federal nondefense discretionary spending last year was at most $600 billion. (a couple hundred billion of security spending is buried in the budget in places like the Department of Energy, so exact numbers are difficult)
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« Reply #9 on: October 04, 2013, 09:42:33 am »

And the fact you don't speak Russian or Arabic is likely owed to quite a bit of that investment in the military.  It's also been a major driver of the private sector economy as well as helping to provide many high-paying engineering jobs.  I guess we could have done without all that and everyone could have worked in shoelace factories for $1 a day.


Oh, puuuullllleeeaaaazzzzeeee....now you are trying to make the Populist argument?

We didn't get to the point of speaking Russian or Arabic (western society) for hundreds of years WITHOUT what Eisenhower was warning us about.

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Gaspar
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« Reply #10 on: October 04, 2013, 10:15:12 am »

No matter the justification for spending, or where the money flows the amount will always increase, and the need for more funding will always increase.  It's the natural order of things.  It's just fun to look back at how the government has justified taxation and spending in the past, and see what that has become over time.

We gain an understanding when we apply the stated "intensions" of past legislation with the stated "intensions" of current legislation.  It is then easy to forecast the results with a high degree of certainty, because the language and mechanics never change. Waste is inherent in government, like incandescent lighting, it produces far more heat than light.  Growth and preservation of the machine is far more important than process improvement or economy, because government enjoys little competitive pressure.  This is also the same reason that quality decreases as funding increases, but that's a different conversation.

Last week the feds (BLM) spent $98,670 on a single hole outhouse on a trail in the middle of the wilderness.  Of course we can spend all day citing examples of government waste, as people have done for decades, but the point is, no one in government has any interest in reducing it, and never will except in a campaign soundbite.


In the end the only process capable of producing economy and innovation in government is starvation.  Its amazing how states and federal government entities all of a sudden discover economy, and even produce innovative ways of doing things (typically common sense to private sector business) when starving. 

About 9 months ago we heard President Obama bleating about how Sequester would result in a deep depression, and veterans would lose benefits, and the economy would lose more jobs, and we wouldn't' be able to support our military, and first responders would lose their jobs, and the earth would fall into the sun.  Fast forward to today and we find that government was forced to innovate and find economy.  Unemployment decreased. . .and just Monday the president proudly touted HIS revolutionary reduction in the deficit, but oddly failed to give any credit to the sequester cuts?

The point is that currently we have a new government program of regulation and taxation that puts over 7% of our economy under federal regulation.  Some of us love the idea, some hate it.  The important thing is that we have an understanding of the language and the mechanisms through the filter of history so that we can realistically forecast the product.
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« Reply #11 on: October 04, 2013, 11:24:47 am »

Last week the feds (BLM) spent $98,670 on a single hole outhouse on a trail in the middle of the wilderness. 

Did that $98K include the planning, permits, ecological impact study......?
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Gaspar
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« Reply #12 on: October 04, 2013, 11:39:15 am »

Did that $98K include the planning, permits, ecological impact study......?

Apparently the toilet itself cost about $9,000 direct from the manufacturer, and the gov reports spending $98k on the toilet and structure, so I would expect the actual expenditure includes imbedded costs and is well over $100-$120k.   Wink
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RecycleMichael
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« Reply #13 on: October 04, 2013, 11:45:52 am »

I don't think that the $98 thousand to build a bathroom in the backwoods in Alaska is out of whack.

Here is a map of the area...
http://www.blm.gov/pgdata/etc/medialib/blm/ak/gdo/pdf_files.Par.12713.File.dat/05TLAD_trails_brochure.pdf

These materials had to be shipped a long distance and assembly meant a contractor had to get crews off the highway to work as well. They had to level ground, pour a pad and build a bathroom that could withstand the harsh weather conditions.

These trails are supposed to be unbelievable scenery and some of them allow four-wheelers. The tourism is picking up and they needed a bathroom in the park.

But I am sure you heard about this outhouse on hate talk radio yesterday and just felt it important enough to express your new outrage for us.
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Gaspar
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« Reply #14 on: October 04, 2013, 12:23:09 pm »

I don't think that the $98 thousand to build a bathroom in the backwoods in Alaska is out of whack.

Here is a map of the area...
http://www.blm.gov/pgdata/etc/medialib/blm/ak/gdo/pdf_files.Par.12713.File.dat/05TLAD_trails_brochure.pdf

These materials had to be shipped a long distance and assembly meant a contractor had to get crews off the highway to work as well. They had to level ground, pour a pad and build a bathroom that could withstand the harsh weather conditions.

These trails are supposed to be unbelievable scenery and some of them allow four-wheelers. The tourism is picking up and they needed a bathroom in the park.

But I am sure you heard about this outhouse on hate talk radio yesterday and just felt it important enough to express your new outrage for us.

It is 1/4 of a mile off the highway next to the trailhead.  That area is closed for half the year.  I am willing to bet the funds could have been spent on a portable outhouse that could be towed away in the winter.  Perhaps take the same $9,000 toilet and install it in a nice wooden building with skids that could be loaded up and hauled to another site in the off-season.  Gosh, it only took me about two minutes to think up that innovative solution that would likely save about $80K.
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