About Income Taxes; Tidbits

1812

The first attempt to impose an income tax on America occurred during the War of 1812. After more than two years of war, the federal government owed an unbelievable $100 million of debt. To pay for this, the government doubled the rates of its major source of revenue, customs duties on imports, which obstructed trade and ended up yielding less revenue than the previous lower rates.

And to think that the Revolution was started because of Tea Taxes in Boston?

Excise taxes were imposed on goods and commodities, and housing, slaves and land were taxed during 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 After the war ended in 1816, these taxes were repealed and instead high customs duties were passed to retire the accumulated war debt.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 used to arrive at your income tax. Taxable income is your gross income minus all your adjustments, deductions, and exemptions.

Some specific taxes:

Estate Taxes:

One of the oldest and most common forms of taxation is the taxation of property held by an individual at the time of death.

The US still has Estate Taxes, although there are proposals to do away with them.

Such a tax can take the form, among others, of estate tax (a tax levied on the estate before any transfers). An estate tax is a charge upon the deceased's entire estate, regardless of how it is disbursed. An alternative form of death tax is an inheritance tax (a tax levied on beneficiaries receiving property from the estate). Taxes imposed upon death provide incentive to transfer assets before death.

Canada no longer has Estate Taxes.

Most European countries have Estate Taxes, one prime example is Great Britain which has such high Estate Taxes that it has just about ruined the financial well-being of most of Britain's Nobility which has been forced to sell vast Real Estate holdings over time.

. Such a tax can take the form, among others, of estate tax (a tax levied on the estate before any transfers). An estate tax is a charge upon the decedent's entire estate, regardless of how it is disbursed. An alternative form of death tax is an inheritance tax (a tax levied on individuals receiving property from the estate). Taxes imposed upon death provide incentive to transfer assets before death.

Capital Gains Taxes

Capital Gains are the increases in value of anything (including investments or real estate) that makes it worth more than the purchase price. The gain may not be realized or taxed until the asset is sold.

Capital gains are normally taxed at a lower rate than regular income to promote business or entrepreneurship during good and bad economic times.

Does Class Warfare Prevent Barack Obama and Hillary Clinton From Understanding Taxes?

During the April 16th debate between Barack Obama and Hillary Clinton, the young senator said repeatedly that he would not raise taxes on middle class earners, those he described as earning between $200,000 and $250,000 per year.

He said the following: "I not only have pledged not to raise their taxes, I've been the first candidate in this race to specifically say I would cut their taxes."

Later, he said he's open to raising the current capital gains tax rate from 15% to 28%.
This alone would nearly double that rate and raise taxes on all 100 million workers who own stock, mostly through owning 401 K'S.

Moderator Charlie Gibson asked Senator Obama why he wants to "increase the capital gains tax when history shows that a higher rate brings in less revenue."

Senator Obama responded by citing rich hedge-fund managers. He then declared that "raising the capital gains tax is "necessary to make sure . . . that our tax system is fair and that we are able to finance health care for Americans who currently don't have it and that we're able to invest in our infrastructure and invest in our schools. And you can't do that for free."

No senator, you can't do that for free. In fact it would cost a fortune. So why propose something that gets you further away from it?

In 2005, 47% of all tax returns reporting capital gains were from households with incomes below $50,000, and 79% came from households with incomes below $100,000.

When Mr. Gibson pressed further about the self-defeating nature of this idea, Senator Obama deflected it to John McCain and how Senator McCain's proposals would in effect drive us further into the terrible, ruinous, tragic and hopeless economy which according to at least one Democratic spokesman, obviously unconcerned with childlike exaggeration, declared that the Bush economy "has made us the most hopeless Americans in US history."

Senator Clinton Also Receptive To Raising Capital Gains Tax Rate

Hillary Clinton said that she "was open to hiking the capital gains tax rate."
However, she too had earlier stated emphatically during Wednesday's debate she would not "raise a single tax on middle-class Americans, people making less than $250,000 a year."

Senator Obama Causes Further Confusion

Senator Obama also wants to lift the cap on wages subject to the payroll tax. That cap was $97,500 in 2007 and is $102,000 this year.

That would raise the maximum payment to $7800 on a tax that had a maximum payment of $60 a year, in its initial year.

It became law in 1935, the argument in favor was that it would always be just a small affordable amount that everyone could afford in order to have a safety net upon retirement.

Opponents in 1935 argued that it would become just another way to fund more programs, and like all government programs would grow incessantly. It has done exactly that.

Congress has already stolen just under $2 trillion dollars from that fund and spent it on old and new programs. It has replaced that $2 trillion dollars with worthless paper IOU'S and put that collection of worthless paper in the TRUST FUND.

Democratic congressmen constantly deceive taxpayers by essentially describing those IOU'S as cash. This allows them to say that social security is solvent till 2041, instead of admitting that it goes from a yearly surplus to a yearly deficit in 2017.

That deficit will soar without drastic reductions in government spending.

Naturally those who contribute little or nothing to FICA are all in favor of raising FICA taxes on hard working Americans. Yes they'll cheer Barack on, hoping that some of the higher payments from others, will come their way.

Barack supposedly represents sweeping change!

What that change is all about is a change to a much higher rate of redistribution than that which presently exists.