Posts Tagged ‘tax preparation’

A Brief Timeline of Taxation Practices of the United States, Part 1

Sunday, February 7th, 2010

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Raleigh NC Tax Preparation

W. Marc Gilfillan, CPA, NC, individual and business CPA and Tax expert, shares about the history of taxes…

From 1868 until 1913, almost ninety percent of the federal government’s income was derived from taxes on alcohol and tobacco. During the Civil War there was a short income tax, but it was not until 1913 when the sixteenth Amendment was passed and enabled Congress to tax incomes “from whatever sources attained.” The first 1040’s were due on March 1, 1914. No money was taken from paychecks and no money was sent in with the return. Every taxpayer’s computations were checked by IRS field agents and a bill mailed to the taxpayer on the first of June.

1766 – Leaders of the colonies got together to protest British taxes under the Stamp Act. This Stamp Act Congress, which it was named, marked the start of the American independence movement and the birthplace of the United States.

1782 – The first Congress under the Articles of Confederation met. This Congress had no ability to tax the people.

1789 – Americans gave a new Congress taxing powers. Without taxing powers, the first Congress of the United States barely survived seven years prior to being dubbed a failure; the 2nd Congress, granted taxation powers, is still going strong after more than two hundred years. If you are feeling the pressure with today’s taxes, call a CPA for Tax Preparation in Raleigh, NC for all your tax-related needs!

1792 – Alexander Hamilton coerces Congress into passing an excise tax on whiskey to increase earned income for the government and curb drinking. In the western frontier whiskey was the traditional medium of exchange, and the twenty-five percent tax was a bit difficult to deal with. By 1794 the area was openly in rebellion. The forerunner of the Internal Revenue Service was spawned to give the tax enforcement. Go here if you want help from a modern-day CPA firm in Raleigh, NC.

1832 – The national debt that remained from the Revolutionary War and the War of 1812 is finally accounted for and paid. The South sees no reason for continued high import taxes that increase the price on goods for Southern consumers and promote industrial monopolies in the North.

1850 – John C. Calhoun of South Carolina tells Congress that the South might secede from the Union due to the fact that heavy taxing of the South increased funds that ended up in the North, creating a massive change in wealth from the South to the North.

Stay tuned for Parts 2 and 3 of the Timeline of US Tax Policy!

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A History of Taxation, Part Nine: Tax Law, the Slaves, and the Civil War

Thursday, January 28th, 2010

Raleigh NC CPA

W. Marc Gilfillan, CPA, NC, individual and business CPA and Tax expert, shares about the history of taxes…

“Slavery – the one cause of the Civil War.” – John Stuart Mill, 1862

Can there be a doubt about it? Certainly the American Civil War was about slavery… wasn’t it? Well actually, one of the most popular myths in our history is that the Civil War was started over the slavery issue and that Lincoln, the Great Emancipator, fueled a terrible war to break the chains of bonding that shackled over three million black Americans. Just prior to the war, the South had everything its way.

In 1860, the South controlled the Supreme Court and Lincoln and Congress were beginning the process of passing a constitutional amendment to keep slavery forever! So what happened?

Let’s rewind the time back to the year 1832. By that year the national debt from the War of 1812 had been extinguished and the South did not see a need to keep up the high import taxes which appeared to only raise price tags for Southern consumers. Either the South had to pay high import taxes on imported goods or it purchased Northern manufactured goods at terribly overpriced prices. Either way, Southern funds transferred to the North. To say the South wasn’t content with this arrangement would be an understatement. If you’re feeling the pressure with today’s taxes, call a CPA for Tax Preparation in Raleigh, NC for all your tax-related needs!

Consequently, in 1832 a convention was held in South Carolina to get rid of these federal import taxes. The South decided the tax was unconstitutional and authorized the governor to defy the enforcement of the import taxes instituted by the national government. It looked like a civil war was in the works. Cool heads won over, however, and the Great Compromise of 1833 reduced import taxes over the subsequent few years to an area the South would tolerate. Go here if you want help with a modern-day Tax Return in Raleigh, NC.

Over the next few years, however, Northern commercial and manufacturing interests forced through Congress new taxes that again stressed Southern planters and allowed Northern Manufacturers to become rich once again. In 1850, John C. Calhoun, the South’s greatest exceptional spokesperson, gave a speech to Congress. His speech spoke of 3 wrongs done to the South that may cause secession from the Union and war. The first two involved fears about the erosion of power of the South in general and the states as well.

The third, and really the only solid grievance, was about taxation. In Calhoun’s eyes, national import taxes was a class legislation against the South. Heavy taxes on the South created funds that were spent in the North. The focus of economic strength in the United States was steadily changing strongly to the North. Calhoun threatened secession if the taxes were not reduced. But what about the slavery issue? Well, in his run for the presidency in 1860, Lincoln steadily repeated he would not interfere with slavery in the South. Truly, most Northerners did not really care about enslaved blacks, any more than they worried about the Native-American in the West or impoverished uneducated workers in factories. By and large many black slaves got better treatment and more compassion than their working-class counterparts in the North. Lincoln, in fact, told Southern plantation-owners that run-away slaves would be caught. The Congress and subsequently the Supreme Court (Dred Scott decision) continually affirmed that slavery was here to stay.

But, just as Lincoln was elected and Congress came together in 1861, they created more high import tariffs. Slavery was not the problem – higher import taxes were. In his inaugural address Lincoln stated he would go get the customs in the South even if there happened to be a secession!

Fort Sumter, at the entrance of the Charleston Harbor, began filling with Union troops to support the collection of the new taxes. The Civil War began in 1861 when South Carolinians shot at the federal garrison at Fort Sumter. The conflict had been stewing for decades – but it was not over the slaves. It was over tax policy.

2 years after that, Lincoln put into action the Emancipation Proclamation, and then only following repeated military defeats, as a last resort to rally the North to a noble cause. To address the slave issue – the majority of Northerners cared little concerning black people in bondage, any more than they cared of Native-Americans in the west or impoverished uneducated peasants in the factories. By and large, many black slaves received better treatment and more compassion than their impoverished counterparts in the North.

That’s it for the History of Taxes Series!

http://www.marccpa.com/

The Lesson in Tax Practices, Section Six: Tax and End of the Romans

Saturday, January 2nd, 2010

W. Marc Gilfillan

W. Marc Gilfillan, CPA, NC, individual and business CPA and Tax expert, shares about the history of taxes…

Mithridates the Great ruled a small country near what is currently known as Turkey. He had an extraordinary power to arouse discontent with disgruntled taxpayers. In 88 BC he led a rebellion fighting Roman rule. By promising 5 years of tax immunity to each city that followed his rebellion, he gathered considerable help.

The Roman Senate quickly took swift action and told General Sulla to raise an army and restore Roman rule in the east. Sulla succeeded in suppressing the rebels after a four year struggle. When the rebellion was crushed, Sulla told the leading citizens of the revolting cities to meet him at Ephesus. At Ephesus the citizens were to denounce the five years of back taxes plus compensate the general for his war debt.

To enforce this tax, Sulla established “special agents.” These special agents had the power to scourge and behead, which was enough to cause most taxpayers fall in line. Until this period there were self-assessment tax collections, corporate tax collecting, army tax collectors and regular government tax collectors. However, these newly instituted “special agents” were very skillful specialists with the arrogance of bureaucrats and the power of military executioners. Taxpayers lost any hope to evade. If you’re feeling the pressure with today’s taxes, call a Tax Preparer in Cary, NC for all your tax-related needs!

Special Agents have emerged time and again in the course of history, surviving in the modern age as “fiscal police” or just “special agents”, using the title first given by Sulla over two thousand years ago. As the use of the general’s special agents was instituted in neighboring nations, the army came to understand that the rich spoils of war came from their commander, not the Roman Senate. Roman generals returned to Rome with the blind loyalty of their soldiers. Huge civil wars started as rivalling legions slaughtered each other. With these moderately private armies, establishment of a military dictator was inevitable. So, the Roman Republic died. Royalty, dictators, and military strategists would now run the Roman Empire for the next two thousand years. Democracies and republics would not play a dominant role in civilization again until the 1800s. Go here if you want help with modern-day Tax Preparation in Raleigh, NC.

Keep an eye out for W. Marc Gilfillan’s next chapter in his History of Taxes series: Taxes and the American Revolution.

http://www.marccpa.com/

A History of Taxation Practices, Chapter Five: Tax Law and The Roman Empire

Sunday, December 27th, 2009

W. Marc Gilfillan

W. Marc Gilfillan, CPA, NC, individual and business CPA and Tax expert, shares about the history of taxes…

Finally moving away from the Greeks, we now are at the Roman Empire. Historians often refer to Roman taxation as “more or less organized stealing” and Roman tax men as “a band of thieves.” But Roman taxation wasn’t always corrupt. There was a 200-year period at the zenith of the Roman Empire when taxes were moderate. Actually, every kind of tax, as well as no taxes, marked the Roman period. Taxes were as necessary yet as unpredictable in the Roman Empire as were the legions, the Senate and the Caesars. The arguably insane emperor Nero once advised to get rid of every indirect tax and create a “wonderful present to the human race.” If you’re feeling the pressure with today’s taxes, call a Tax Preparer in Cary, NC for all your tax-related needs!

 

The Roman Republic – The Early Years

The early Roman Republic required little taxation because it operated with free labor. The army, which is arguably the most expensive operation in every society, was a citizen’s army, comprised of land-owners who served for one year without pay. They even brought their own uniforms and gear. This level of volunteer free public service extended to most government offices. Even the judges worked for the city without pay. It is difficult to understand the importance of this ancient practice, especially in our age, when no one seems willing to lift a finger for the government without a fat paycheck. Go here if you want help with modern-day Tax Preparation in Cary, NC.

The ideal way to reduce heavy taxation is to instil in all citizens a spirit of unselfish service for the public good. It is not necessary to curtail public programs and services; what is needed is the curtailment of the spirit of gain and profit that infests public figures and contractors.

The Romans, similar to other ancient civilizations, used the great people of their society to deal with taxation. Taxpayers loved and admired these men, and no doubt the integrity of these great men rubbed off on the taxpayers. By contrast, modern tax systems use professional public relations contractors to manipulate taxpayers with advertising campaigns that utilize fear more than integrity. Trouble started, however, when Roman armies lived off of the people and took tribute in block form called “stipendium”.

Keep an eye out for W. Marc Gilfillan’s next chapter in his History of Taxes series: Taxes and the American Revolution.

http://www.marccpa.com/

A Lesson in Taxation, Part One: Taxes and Ancient Egypt

Wednesday, December 23rd, 2009

W. Marc Gilfillan

W. Marc Gilfillan, CPA, NC, individual and business CPA and Tax expert, shares about the history of taxes…

Ancient Egypt was not a land of terrible taskmasters and oppressed slavery – that’s simply the impression we get from the story of Exodus, which came at a time of turmoil in Egypt. Modern translations of Egyptian language tell a tale of life in ancient Egypt was usually bountiful and relatively at peace. The land was rich, women and men had roughly equal rights and life was good for most. But, there were tax collectors, as numerous as “the sands of the seas”. The high level of Egyptian life was maintained by these “scribes” whose job was enforcing the pharaoh’s tax mandates. Most all aspects of life were taxed – sales, slaves, foreign people, imports, exports, and businesses. Agriculture was taxed at a hefty 20%. There was also a tax on cooking oil and inspectors would make continuous visits to kitchens to ensure that free drippings were not being wasted instead of the taxed oil.

The word “freedom” ironically in ancient Egypt referred not to one’s political or social liberty but to a person’s tax level. If you were “free,” it meant that you were exempt from taxation. Ironically, the word can’t be found anywhere in the Egyptian language. Good thing we live in this time eh? Go here if you want help with modern-day Tax Preparation, bookkeeping, and payroll in Cary NC.

However, the scribes were never brutal (at least in theory). They were taught to act kindly to the poor and defenseless. One ancient text instructs: “if a poor farmer is in trouble with his taxations, cut two-thirds of them.”

Another text encourages officials to “cheer up everyone and to direct them into a good mood.”

And, if someone is suffering under pressures of their taxes, or is at the end of his means to pay them, you must let the case go unchecked.” If you’re feeling the pressure with today’s taxes, call a Raleigh NC Accountant for all your tax-related needs!

This lenient policy was called “philanthropa”. From this word we get the word philandthropy.

Over the 3000 years of the Egyptian empire, there were many periods of humane and decent tax administration.

Keep an eye out for W. Marc Gilfillan’s next chapter in his History of Taxes series: Taxes and the Greeks. http://www.marccpa.com/