Great-Grandpa's Taxes

Just in time for Tax Day, a collection of 1040 forms from 1913 to 2006. Surprise: They used to be shorter.

Comments

[The Price of Civilization]

The Price of Civilization, a publication of the Tax History Project at Tax Analysts, is a broad-ranging study of U.S. federal taxation between 1932 and 1945. In particular, the project seeks to illuminate the development of mass-based personal income taxation, uncovering the ideas, interests, and imperatives that moved the income tax to the center of federal finance. World War II and its dramatic revenue needs tell much of the story, but the war does not explain why various alternatives -- including a general sales tax -- were considered but ultimately rejected. In an effort to recapture the contingency of the policy process, the Price of Civilization hopes to shed light on what might have been but wasn't.
The Price of Civilization includes both documentary and analytical components. Culling material from the National Archives, the Library of Congress, and various presidential libraries, the Project compiles and republishes key policy studies on federal taxation. The Project also seeks to collect and preserve interviews with key federal tax officials.

Why do libertarians hate civilization?

[The Price of Civilization]

Is it the roads?

[Anonymous]

Old tax forms? It's like the 1920s burlesque porn of the mirror universe.

(Yes, the ladies have evil beards in the mirror universe; but they're all revenuers!)

[Kolohe]

Actually, they used be longer. (check out '45 for instance) But included most everything on the single form.

[James Anderson Merritt]

Since the tax code was less complex back then, and since our family income was fairly simple in 2008, I took a few minutes (and it only took a few) to fill out the 1913 form for myself and wife, filing jointly.

If I didn't account for inflation, we ended up paying, in dollar terms, less than one-fifth of the income taxes we had to pay this year.

If I accounted for inflation, however, our joint income was actually less than the married-filing-jointly standard deduction for 1913. We would have been obliged to pay NO U.S. INCOME TAX WHATSOEVER. By the standards of the day, we wouldn't have been "rich enough" to qualify.

Of course, I don't think we are rich enough to qualify by the standards of THIS day, either. But the Beltway Bureaucrats and Congress Critters clearly disagree.

[CuriousGeorge]

Well you shall soon have your wish regarding shorter tax forms.

Obama's new tax form:

Amount Earned_____

Remit Amount Earned ______

[Jose Ortega y Gasset]

"Why do libertarians hate civilization?"

Why do prisoners hate the shower room?

[Anonymous]

Obama's new tax form:

Amount Earned_____

Remit Amount Earned ______

When I clicked "yes" for flat tax, that was not what I meant!

[*]

In inflation-adjusted dollars, you would have to have an income equivalent to $414,649 before you were required to pay any taxes in 1913. And then it was a whopping 1%. The rate topped out at 6%. To have that onerous requirement placed on you, you would need a net income of $10,366,244 or more in inflation-adjusted dollars. I'm living in the wrong era.

[anarch]

I look forward to the day when curiosity about such artifacts will be regarded by decent huamn beings with the same pitying disgust as....

Godwin!

[The Chad]

* that can't be right. say it ain't so...

man we are being bent over backwards

[James Anderson Merritt]

To *: Did you and I read the same tax forms? On the 1913 form, it appeared to say that, beyond the standard deduction ($3K for individual, $4K for married-filing-jointly), you owed tax of 1% of the difference between your taxable income and $20,000. Then you owed 1% on the remaining income to $50K, 2% on the portion of your income between $50K and $75K, 3% on the portion between $75K and $100K, and so on, up to the highest tax bracket of the time. That was still a very sweet deal by today's standards, even without inflation adjustment. And with inflation adjustment, it was very sweet indeed, as I mentioned in my earlier message. Did I read the instructions wrong, because what you said above seems to be an even sweeter deal yet!

And to The Chad: Yes, we are not only being bent over backward, we are being bent over ROYALLY backward.

Assuming that they still teach Civics or something like it in public schools today, it would be great for kids to take home the 1913 forms to their parents and do their own family taxes based on the most recent information filed. The class assignment wouldn't have to involve reporting the amount of tax or the amount of income, but simply whether the family would pay taxes or not pay taxes, and if the latter, what fraction of this year's actual taxes would they have paid. That would be in simple dollars, without inflation adjustment. Extra credit for adjusting the current-day relevant IRS form figures to 1913 dollars using the government's online CPI calculator, and figuring the 1913 tax on that basis. Get a parent's signature that they reviewed the 1913 returns (or at least the bottom line figures) and call it good.

If this assignment simply opened people's eyes about the reaming we receive these days ... and especially if it kindles the spirit of tax resistance in the young generation ... it would be one of the best outcomes produced by public education in decades.

[robc]

All interest paid within the year on personal indebtedness of taxpayer

1913 didnt include a mortgage interest deduction, it included an interest deduction. Paid interest? Yeah, you can deduct that. Mortgage, car, credit card, student loan, whatever, all that interest is deductible.

[Pedro]

I like how all taxes above 1% are called a super tax.

[?]

I understand now how my grandfather could retire at twenty-five.

I knew he invented something (unimportant) and sold the patent rights. I know how much he got for that, and that my earning roughly that many dollars every year can't buy me a lifestyle even approaching his. I blamed inflation. Still do.

What I didn't account for, because it's completely foreign to my experience, is that he got to keep the money.

Uncivilized.

[rxc]

I used to be able to fill out my tax forms without looking at the instructions, but around 1984, things got more complicated, and I had to start reading carefully. In the mid-90s, however, it became completely impossible to understand what was going on, so I started to buy software, and am now completely dependent on it. I enter the numbers into the boxes, and out pops a completed form, and I just accept it, without understanding how it gets to the bottom line. The tax code has now become completely unfathomable for me.

Oh, BTW, I used to write regulations for the operation of nuclear power plants, so I have some experience with complex regulations...

[mark]

Regarding 'the price of civilization', if you take a look at that 1913 tax form, you will note that the feds demanded to know about your income "derived from salaries, wages, or compensation for personal service of whatever kind and in whatever form paid", in chickens for instance. I assume you'd have to convert the chickens to dollars, maybe there's another manual for that.

The form goes on to list in great detail the many ways you can make money, all of which must be accounted for and taxed. So as you can see, they were itching to take money from anyone who did anything at all for a job. That is the price of civilization, as decided by 1913 legislators and Woodrow Wilson.

[Untermensch]

Regarding the 1913 form, did we read the same form? I fail to see this detailed list you refer to. There is one page of definitions, one of which, interestingly, basically says there is no imputed income (i.e., you aren't liable for rents paid on your home unless you actually rented it and you aren't required to pay on real estate gains unless you actually sell it). But other than that the majority of the single page either explains administrative requirements (dates, penalties, etc.) or defines loss. Only about a quarter of the page you refer to actually refers to the way you can make money.

You might argue that that's a quarter page too long, but it's not a "list in great detail [of] the many ways you can make money, all of which must be accounted for and taxed" by any stretch of the imagination.

It doesn't help the Libertarian cause if we're so doctrinaire that we treat something like that 1913 form as far more complex than it is. I guess I'm a gradualist rather than a revolutionary, but I would much rather prefer that 1913 form to anything I've seen in my lifetime and find it about as unobtrusive and unobjectionable as any tax form could be if we have to have an income tax. Certainly far simpler than what we have today...

[Untermensch]

err, "?two of which? say?." My mistake.

[MJ]

"Why do libertarians hate civilization?"

Because civilation of late is overpriced, shabbily made, and has too many features you don't want and not enough you do.

[Untermensch]

Looking at it more, I'm guessing you didn't bother to actually read the 1913 form before pronouncing how bad it was. Out of 20 items on the fourth page, only three items detail what constitutes income: 11 (what constitutes farm income), 13 (professional fees), and 15 (returns on partnerships). Together they account for only a little less than a quarter of the page. Even that's being generous, since most of point 11 actually defines what you don't have to count as farm income.

About 1/3 of the page details losses you don't have to pay on or exclusions from income for the purposes of the tax.

The rest is administrative or penal in nature.

So if anything, the long list you refer to is more interested in telling you ways you can lose money than on ways you can make it and on simply being clear what the (relatively straight-forward) basis is for assessing income.

So as you can see, they were itching to take money from anyone who did anything at all for a job. That is the price of civilization, as decided by 1913 legislators and Woodrow Wilson.

Given the comments above the point where the tax kicks in (equivalent of >$400K today), I'm going to call you on this point and say you are, simply, wrong. What you write just wasn't true. They may have had a "soak the rich" attitude (although I'd love to be soaked with that tax rate today), but they certainly weren't trying to "take money from anyone who did anything at all for a job" if they weren't imposing a tax at all on the vast majority of people who worked.

[Anonymous]

Why do libertarians hate civilization?

Civilization precedes taxes. Government feeds off of and attempts to freeze for the purpose of reducing risk civilization with taxes.

[ed]

Taxes fund many things useful and wasteful. Politicians get to choose them. We elect the politicians. They represent us. The end.

[anarch]

Why do libertarians hate civilization?

Most don't.

Those many who don't are practicing returning good for evil.

Right now (and it's not been this way at all times and in all places), civilization treats libertarians the way moody adolescents treat their kind parents: Drunk on newly discovered powers and unappreciative of their indebtedness to their Golden-Rule-following benefactors, an immature tyrant sets out to kill the Goose That Has Laid the Golden Egg - multiple references to gold-standard being incidental. 😉

Nothing more strongly conduces to a beneficent image of humanity that the persistence of the hope libertarians hold out for the conversion of the brat enjoying his boot pressing on his benefactor's face.

[Untermensch]

Nothing more strongly conduces to a beneficent image of humanity that the persistence of the hope libertarians hold out for the conversion of the brat enjoying his boot pressing on his benefactor's face.

Could you translate this into English, please? I've tried to parse it repeatedly and cannot figure out what you're saying. Too many dependent clauses and odd constructions here...

[creech]

Taxes are what we pay because we don't have a civilized society. If we all were civilized,
we would voluntarily pay for the goods and services we consume without expecting someone else to subsidize us. For those whose circumstances don't permit paying, there would be real compassion and help for those deserving. Because we expect other men to live for our sakes, we aren't civilized and that's why armed government officials are used to enforce the tax code.

[R C Dean]

I enter the numbers into the boxes, and out pops a completed form, and I just accept it, without understanding how it gets to the bottom line. The tax code has now become completely unfathomable for me.

Same here. Tax software, like withholding, is the opiate of the taxpayer, anesthetizing them to the pain of the current tax code.

If we had to fill out our tax returns by hand, and write a check once a year for the full amount owed, our tax code (and burden) would look nothing like it does now.

[anarch]

Apologies, Unter.

Trying again:

Libertarian principles - that is, recognition of the lasting mutual value of individuals' free exchange of ideas, services, and goods - has made civilization possible. Civilization is thus the beneficiary of libertarianism.

But not all beneficiaries of civilization appreciate their indebtedness to libertarian principles. Beneficiaries of civilization who fail to realize their indebtedness to libertarian principles act like ungrateful adolescents hostile to the parents who have provided for them. Like bratty punks, such ingrates arrogantly combine immature cleverness with brutal powers in sustained and impenitent efforts to wound their benefactors. They gain illegitimate strength by banding in gangs, often wearing cultic uniforms designed to intimidate as a substitute for reciprocity and rational persuasion. Insulated from an awareness of their indebtedness to others' gifts, they operate extortions motivated by narcissistic claims of unjust entitlement.

Libertarians who, in the face of opposition from their beneficiaries, persist is defending everyone's individual rights - including the rights of those who oppose them - are like long-suffering parents. They accept that experimenting in tyranny is part of growing up. They sustain hope that the brats they have raised will mature. They persist in believing that their jackbooted oppressors will one day awaken, undergo a change of heart/mind, and prove worthy of the liberty they are currently abusing.

It's a kind of secular martyrdom.

And yes, I am aware that ancient civilizations were tyrannies.

[domoarrigato]

These guys say that the top taxe rate from 1944 was over 95%. but based on the form from 1944, that doesn't seem possible. Anyone know why?

[Russ 2000]

1913 didnt include a mortgage interest deduction, it included an interest deduction. Paid interest? Yeah, you can deduct that. Mortgage, car, credit card, student loan, whatever, all that interest is deductible.

That's why all the people who say that the mortgage interest deduction is a subsidy are just plain wrong.

[Anonymous]

creech, that's masterful. In those terms, I can't immediately tell whether I completely agree or vehemently disagree. I'm leaning toward the latter. You're awfully close to "if everyone were honest, anarchy would work" here. It's a true statement only because the premise is necessarily false.

The point is that I accept my own risks, and if the state is going to exist at all, then it's a minarchy that's going to be used to arbitrate externalities between willing parties with minimal interference. The point is that because a collective has decided it wants to burden me with their risks, they use their funds to enforce that state of welfare. That mentality is greatly aided by the view of an economy as a zero-sum game (or, equivalently, as a totalitarian fiefdom, where all transactions go to benefit the lord or collective), wherein inefficient central planning is the goal, instead of lean and efficient utility-maximization.

[R C Dean]

Nothing more strongly conduces to a beneficent image of humanity that the persistence of the hope libertarians hold out for the conversion of the brat enjoying his boot pressing on his benefactor's face.

Could you translate this into English, please?

Well, there's a typo that doesn't help. I like the sentiment, though. Try this:

Nothing more strongly conduces to a beneficent image of humanity that than the persistence of the libertarian's hope libertarians hold out for the conversion of the brat enjoying who enjoys his boot pressing on his benefactor's face.

[anarch]

@ RC:

Thanks to sleep-deprivation, one of the risks of getting urgent news-flashes out to a hungry public for rapid consumption at an early hour is that the opportunities in which re-writing can occur are limited.

[Mo]

domo,

Page 4 is where you compute taxes > $5,000. Line 6 states the need for a Surtax Table, which I can't seem to find. That must be the source of the high tax rate.

[mark]

Unter,
I did indeed forget about the standard deduction, which for a single filer would be around $50,000 today (according to this inflation chart), not $400k. Still you are right that at the time of the enactment of the income tax, only the most well-off people paid it at all, and most laborers/farmers/etc did not have to give a moment's thought to the taxman from Washington, a vastly different situation from what we have today. I stand corrected.

My hope is that one day a President can deliver an inauguration address like this one, in which he boasts that most people never have to see a tax-gatherer of the United States.

[engineer]

"We elect the politicians. They represent us. The end."

Funny, I don't remember voting for the current crop.