taxpayer receives a check from
their employer. Taxpayers who don't have an employer usually are required to
make estimated tax payments throughout the tax year. Other countries have
similar tax policies.
Again, in 1993 another act was
signed to lessen the tax deficit. On August 10, 1993, President Clinton
signed the Revenue Reconciliation Act of 1993 into law.
What was different about the
1993 act to the 1986 was that the Revenue Reconciliation Act of 1993 affect
almost every taxpayer, not only the rich. This new tax act decreased the tax
planning benefits and tax planning strategies previously enjoyed by many.
Then again in 1997, President
Clinton signed a tax revenue act which cut taxes by $152 billion including a
cut in capital gain tax for individuals a $500 per child tax credit along
with tax incentive for education.
This per child tax credit has now increased to
$1,000 per child. The child tax credit started at $400 per child and
increased to $500 per child in 1999. It was with this act that Roth IRAs
were established. This act also exempted the capital gain taxation of the
sale of personal residences of up to $500,000 for married couples and up to
$250,000 for single taxpayers. There is also a $600,000 estate tax exemption
and family farms and small businesses can qualify for exemption of $1.3
million. It was also at this time that the annual gift tax was corrected for
inflation.
We have come a long way from
200 years ago. From 1791 to 1802, the United States government was supported
by internal taxes on distilled spirits, carriages, refined sugar, tobacco
and snuff, property sold at auction, corporate bonds, and slaves. Now, the
government gets their review from more modern items in addition to the items
from 100-200 years ago. This includes more modern items such as commerce
transacted over the internet and plastic surgery tax.
It all stated in 1791. Before
that really. Way before that in some form or other. It is just that things
become formal at one point. In 1862, in order to support the Civil War
effort, Congress formally enacted the nation's first income tax law and it
was a forerunner of our modern income tax.
The nation's first sales taxes were on gold,
silverware, jewelry and watches due to the high cost of the War of 1812.
This war resulted in struggles.
Individuals did not only have to worry about certain war uncertainties, but
by this time they also had to worry about complying with the government and
pay tax. During the Civil War, a person earning from $600 to $10,000 per
year paid tax at the rate of 3%.
Then In 1868, Congress focused
its taxation efforts on tobacco and distilled spirits and eliminated the
income tax in 1872.
The government has recently
become concerned with public health and has passed certain taxes on tobacco
products to discourage their consumption.
Many things have transpired
over the years in regards to taxes. For example, in 1895, the U.S. Supreme
