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Taxes |
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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 After the war ended in 1816, these taxes were repealed and instead high customs duties were passed to retire the accumulated war debt.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. Frank Vanderlugt
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