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Fun Tax Facts

 

1. Taxes and taxation are often received with mixed emotions. Historically, taxes have been met with rebellion and unrest; patriotism; war; and voluntary compliance. French tax collectors were sent to the guillotine in 1789. Greece, however, revered the tax professional as the most noble man in society.

2. The Duck Stamp Act is a direct tax that applies to people over the age of 16 who want to hunt waterfowl. It came about because a group of sportsmen and conservationists lobbied for a program to protect migratory waterfowl and wetlands-the informal tax legislation process at work! Since its inception in 1934, the Duck Stamp has become a popular collector’s item. (It is an actual stamp!) A person who bought each stamp the year it was issued would have paid around $400 for the stamps by the year 2000. Today these stamps would be worth over $5,000. Check out the U.S. Fish & Wildlife Service website for more information on The Federal Duck Stamp Program.

3. In 1913, Congress levied a one percent tax on net personal incomes above $3,000, with a six percent surtax on incomes above $500,000. As the nation sought greater revenue to finance the World War I effort, the top rate of the income tax rose to 77 percent.

4. One of the world's oldest tax systems was proportional. In the days of the Old Testament, a "tithe" or tenth of a person's income was collected for religious purposes. The custom of tithing was continued by the Christian church and was the main funding for the many splendid cathedrals that were built in Europe. The tithe could be paid in money or its equivalent in crops or livestock. It was used to maintain the clergy and keep churches in repair. The tithe was also used to help the needy.

5. In the South, some citizens once had to pay a poll tax in order to vote. Often, African Americans and those with low incomes could not afford to pay the tax and were therefore denied the right to vote. The Twenty-fourth Amendment, ratified in 1964, declared the poll tax requirement unconstitutional.

6. Taxpayers may indicate on their tax returns that money be given to the Presidential Election Campaign Fund. In 2001 about $58 million was given to the Presidential Election Campaign Fund.

7. To collect taxes, the federal government relied on voluntary compliance. To encourage people to learn about and pay their taxes, the government turned to popular culture and media. The government had cartoon character Donald Duck visited Washington, D.C., and learned about taxes in the short film "The New Spirit." Popular composer Irving Berlin wrote the song "I Paid My Income Tax Today." While popular singer Danny Kaye included songs about paying taxes in his club appearances.

8. Back in 1913 tax rates ranged from one to seven percent on incomes above $3,000. This tax rate doesn't sound like much until you consider the average annual income for the time was only $800.

9. The most misused Social Security number of all time was 078-05-1120. In 1938, as part of a promotion to sell wallets through Woolworth and other department stores, wallet manufacturer E. H. Ferree Company wanted to demonstrate how a Social Security card would fit into its wallets. A sample card was placed inside each wallet and displayed the Social Security number of the company's secretary, Mrs. Hilda Schrader Whitcher. Even though the sample card was half of the size of an actual Social Security card, was written in red, and had Specimen written in bold, many people confusedly used this as their own Social Security number. In 1943, 5,755 people were using Hilda's number. In all, about 40,000 people reported 078-05-1120 as their Social Security number.

10. On January 24, 1986, the first electronic transmission of tax return data from a preparer to the IRS was completed. By 1989, taxpayers in 36 states could file their taxes electronically, and by 1990, taxpayers throughout the country who expected a refund could file electronically. E-filing can dramatically reduce errors. The error rate for a paper return is 21 percent, compared with an e-file return error rate of half a percent.

11. People in the United Kingdom (U.K.) pay a tax that is unheard of in the United States. They pay their government a single license fee of £126.50 (~$232) for color televisions and £42.00 (~$77) for black and white televisions. That covers all TV sets used by one family or a household living communally at an address! Who has to pay? All United Kingdom residents under the age of 75 must pay for TV licenses, though citizens who are legally blind pay only 50 percent of the full fee. Do you think this is a joke? Check out the TV Licensing Authority.

12.The IRS, a branch of the Department of Treasury, deals directly with more Americans than any other institution, public or private. It also is one of the world's most efficient tax agencies. In 2000, the IRS collected more than $2 trillion in revenue and processed 226 million tax returns. It also had the lowest cost/collection ratio since 1954. For every $100 collected by the IRS it costs taxpayers only 39 cents.

13. Individual income tax returns, including those for elected officials, are private. The Internal Revenue Service cannot release the information to the public. However, since the 1970s, most presidents have released their own tax forms. For the year 2000, President George W. Bush and his wife, Laura, declared a taxable income of $744,682 with a total tax liability of $240,342. President Bush and his wife reported $673,000 in taxable income in 2004, paying $207,000 in federal income tax. The White House said that Bush's income was made up of his $400,000 annual salary, as well as about $390,000 from taxable interest, dividends and real estate. He and his wife claimed itemized deductions, which were not made public, of $111,431.

14. Did You Know? Paper and metal aren't the only things used to make money. Under the rule of Aztec emperor Montezuma, the cocoa bean was used as currency. For example, if you wanted to buy a rabbit from the Aztecs, it would cost you 4 cocoa beans.

15. Historically, market economies periodically suffer short periods of high unemployment. During the 1930s, the Great Depression seriously slowed the economy of the United States. During the Great Depression 12 to 15 million Americans were out of work.

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Fun Tax Facts are from "Understanding Taxes" on www.irs.gov.