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Asset Preservation Advisors




City:Atlanta

State: GA



BIOGRAPHY:
APA’s philosophy is to work closely with our clients to develop an in-depth understanding of their unique needs and objectives. We then customize a municipal bond portfolio that best meets their specific goals and needs. APA manages high quality municipal bond portfolios in four strategies: Short-Term, Intermediate-Term, High Income, and Taxable.

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Federal Income Tax Celebrates its 100th Year of Existence

The Federal income tax turned 100 years old last week.

| BY Kent McDill

On Oct. 4, 1913, the 16th Amendment to the Constitution was ratified, making permanent the federal income tax for the United States. That means Friday, Oct. 4, 2013 was the 100th birthday of the federal income tax.

How did you celebrate?

The income tax has joined death as the two things in life you cannot avoid. But the federal income tax has gone through numerous changes in its lifetime, not the least significant of which it went from being a 400-page document to its current state as more than 73,000 pages.

The federal income tax has been a talking point for nearly every federal election since it was created in 1913, and remains a sticking point for most Americans. In a 2013 Spectrem study of Millionaire investors, 71 percent said tax increases were a personal concern, although it ranked behind the political environment (85 percent), the economic downturn (83 percent) and the national debt (80 percent) as significant concerns.

Here is a quick look at the history of the federal income tax:

1791 – From 1791 and for the next 20 years, the United States government was financially supported by taxes on distilled spirits, refined sugar, property sold at auction, carriages, tobacco, corporate bonds, and slaves. When the United States entered the War of 1812, it paid for the war effort by adding sales taxes on gold, jewelry, watches and silverware. In 1817, the U.S. Congress dropped all internal taxes, and was dependent then on tariffs on imported goods for financial support.

1862 – In order to pay for the Civil War, the U.S. Congress enacted the first income tax law, and it was similar in many ways to the current law, based on a graduated taxation and required withholding of income tax from its source. Through the Civil War, the income tax for citizens making between $600 and $10,000 per year was 3 percent, and those making more than $10,000 were taxed at a higher rate. (Four years later, Congress enacted excise taxes and an inheritance tax). The office of Commissioner of Internal Revenue was created along with the enacting of the income tax in 1862.

1872 – The income tax was again eliminated, as the U.S. government depended on income from taxation on tobacco and alcohol.

1875 – After the income tax was reinstated in 1874, the U.S. Supreme Court declared the income tax unconstitutional in 1875 because it did not conform to the Constitution’s rules about equal distribution of income according to population. However, in that ruling, the Supreme Court clearly stated the U.S. government has the right to enact a direct income tax.

1913 – The 16th Amendment of the Constitution is passed, making the income tax permanent, giving Congress legal authority to tax income. By 1918, income tax revenue reached $1 billion for the first time.

The income tax has undergone numerous changes in its 100 years, and has also faced numerous attempts to have the 16th Amendment repealed, but such efforts have yet to get very far.



About the Author


Kent McDill

kmcdill@spectrem.com

Kent McDill is a staff writer for Millionaire Corner. McDill spent 30 years as a sports writer, working for United Press International and the Daily Herald of Arlington Heights, Ill. From 1988-1999, he covered the Chicago Bulls for the Daily Herald, traveling with them every day through the nine-month season. He also covered the Bulls for UPI from 1985-88, and currently covers the team for www.nba.com. He has written two books on the Bulls, including the new title “100 Things Bulls Fans Should Know And Do Before They Die’, published by Triumph Books. In August 2013, his new book “100 Things Bears Fans Should Know And Do Before They Die” gets published.

In 2008, he resigned from the Herald and became a freelance writer. The Herald hired him to write business features and speeches for the Daily Herald Business Conferences and Awards presentations.

McDill also writes a monthly parenting column for the Herald’s Suburban Parent magazine.

McDill is the father of four children, and an active fan of soccer, Jimmy  Buffett and all things Disney.