If you are wondering why the income tax system is destined to collapse, just take a quick look at where we’ve come from.
The very first 1040 Federal Income Tax form from 1913 appears above. Notice that:
1. Taxes were only paid on income above $20,000, equivalent to $407,000 in today’s dollars, at the initial rate of only 1%. (Correction: Income taxes in 1913 were actually assessed on income above the personal exemption of $3,000, equivalent to $61,000 today).
2. The highest marginal tax rate in 1913 was 6%, which applied to income above $500,000, equivalent in today’s dollars to about $10 million.
The entire 1040 tax form in 1913, including all forms and instructions, was only 4 pages, click here to view. All instructions in 1913 were contained on a single page, compared to the 2006 1040 Instructions, which run 143 pages long, without any forms.
Via CARPE DIEM