Wednesday, January 31, 2007

TAX SIMPLIFICATION as we once knew it-

-TAX SIMPLIFICATION (it started out pretty simple)

The 1913 Form 1040 was four pages long.

Page 1 summarized everything in 8 lines:

  1. Gross Income
  2. General Deductions
  3. Net Income
  4. Dividends and corporate-related income
  5. Tax Withheld
  6. Exemptions $ 3000-$4000)
  7. Taxable Income
  8. Tax (1% if your taxable income was $20,000-$50,000) If you made over $ 500,000 the tax was a whopping 6%. Soak the rich!

Page 2 was a summary of nine categories of income which were to be included in lines 1 and 4 of page 1.

Page 3 was a summary of “general deductions” consisting of six categories. One category was “a reasonable deduction” of depreciation. They didn’t even use the word depreciation, but called it an allowance for wear and tear.

Page 4 was the instructions.

LINKS and References – go to
IRS References

This information is not intended to be advice to the recipient. In compliance with Treasury Department Circular 230, unless stated to the contrary, any Federal Tax advice contained in this Blog was not intended or written to be used and cannot be used for the purposes of avoiding penalties.


Ulli...The Wall Street Bully said...

While not everything in 1913 was great, this type of simple taxing should be a sesson for today's leaders.

I shudder at the thought of how much money a simple tax plan such as this could save in adminstrative costs alone.

taxxcpa said...

Any inequity by cutting out all the present attempts to make it 'fair' would probably save money even for the people that benefit from some of the special deductions and credits. It should reduce the bureaucracy costs enough to offset any lost credit or deduction.