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71 Interesting Facts About . . .

Taxes

  1. The word “tax” is from the Latin taxo, meaning “I estimate.”b
  2. Approximately 90% of people who employ housekeepers and babysitters cheat on their taxes.f
  3. If someone reports their company for tax evasion in the U.S., he or she will receive 30% of the amount collected.f
  4. The federal tax code was 400 pages in 1913. In 2010 it was 70,000 pages.e
  5. Tax Facts In 2012, nearly half of Americans did not pay federal income tax
  6. Around 47% of Americans did not pay income tax in 2012. In 2007, before the economic downturn, 40% of households did not owe federal income tax.g
  7. The average number of days a person worked to pay his or her 2009 taxes was 103.l
  8. The number of words in Atlas Shrugged is 645,000. The Bible has about 700,000 words. The number of words in the Federal Tax Code: 3,700,000.l
  9. There are several types of taxes, including income, Social Security, sales, property, and excise taxes.f
  10. While the federal corporate tax rate is 35%, in reality, many companies usually pay far less than that because of loopholes and subsidies.b
  11. Wealthier Americans pay higher taxes than middle- or lower-income earners. The wealthiest 1% of the population earns 19% of income but pays 37% of the income tax. The top 10% pays 68% of the tab. The bottom 50% earns 13% of the income, but pays just 3% of the taxes. This does not include payroll taxes for Social Security and Medicare.f
  12. Everyone who earns a paycheck pays a federal income tax. Forty-three of the 50 states charge their citizens an income tax. The seven states that do not have a state income tax are Alaska, Florida, Nevada, South Dakota, Texas, Washington, and Wyoming.f
  13. In 2010, General Electric made over $4 billion in U.S. profits. It paid $0 in taxes.f
  14. The United Sates has what is called a progressive tax system, which means that the more money a person makes, the more he or she pays in income tax.
  15. Excise taxes are also called “sin taxes.” They are taxes on alcohol, tobacco, and gambling.f
  16. The top five states with the highest state tax on cigarettes are Rhode Island (3.46), New York ($2.75), New Jersey ($2.70), Hawaii ($2.60), and Wisconsin (2.52). New York City is the most expensive place in the U.S. to buy cigarettes because it adds a city tax ($1.50) onto the state tax, which results in a combined tax of $4.25.f
  17. Taxes can be either direct or indirect. A direct tax is a tax paid directly to the government, such as income, Social Security, sales, property, and excise. An indirect tax is one that is passed on to another person or group. For example, the cost of fuel includes a tax that consumers pay. In other words, instead of oil companies paying that tax, they pass it on to consumers.b
  18. The IRS is a U.S. government agency that is responsible for collecting taxes and enforcing revenue laws. It is part of the U.S. Department of the Treasury.b
  19. Roman emperor Vespasian placed a tax on urine in the 1st century A.D. Urine at that time was collected and used as a source of ammonia for tanning hides and laundering garments.j
  20. England Tax A window tax in England eventually led to health problems
  21. In 1691, England taxed the number of windows on a house. Consequently, houses began to be built with very few windows or people would close up existing windows. When people began to suffer health problems from lack of windows/air, the tax was finally repealed in 1851.a
  22. Russian Emperor Peter the Great placed a tax on beards in 1705. He hoped that the tax would encourage men to have a clean-shaven look that was popular in Western Europe.a
  23. Over 1 million accountants are hired each year in America to help with taxes.l
  24. One of the contributing factors to the French Revolution was a salt tax called the gabelle. It was one of the most hated and unequal taxes.a
  25. Canada created the Chinese Head Tax in the 1880s, which taxed the entrance of Chinese immigrants into Canada. It was created to discourage Chinese from entering the country after the Canadian Pacific Railway was completed. That tax was abolished by the Chinese Immigration Act of 1923, which completely banned most forms of Chinese immigration to Canada. While in place, the tax collected $23 million ($800 million in 2013 dollars).f
  26. England has a tax on televisions. Color TVs are taxed more than black-and-white TVs. However, if a blind person has a television, he or she has to pay only half the tax.j
  27. Double amputees in Oregon get a $50 tax credit.j
  28. Texas has a “pole tax” which is a tax on strip clubs, peep shows, and nude dancing. The revenue from the tax goes to sexual assault victims and health insurance for the poor.j
  29. While disposable diapers are subject to sales tax in Wisconsin, cloth diapers are not.k
  30. Americans spend over $27.7 billion every year doing their taxes.a
  31. In Texas, cowboy boots are exempt from sales tax. Hiking books are not.k
  32. It is estimated that the collective cost of tax evasion over the last 10 years in the United States equals approximately $3.09 billion.m
  33. Following Jimmy Carter, every U.S. president has released their tax returns.f
  34. The federal form 1040 was introduced in 1913 and was required of U.S. citizens and legal permanent residents with a net income of $3,000 or more for the taxable year. It consisted of just three pages.d
  35. In 2009, Bank of America had an income of $4.4 billion. However, they paid $0 in taxes.l
  36. The first income tax in the U.S was imposed in July 1861 to help pay for the Civil War. In 1862, it was repealed and replaced with the tiered income tax. The current income tax system was made into law in 1913, before the start of WWI.d
  37. There are at least 480 tax forms on the IRS website.f
  38. In 2007, the IRS reported that 99,316,995 taxpayers called, wrote, or walked into an IRS office for help. That is roughly 1 in 3 Americans.d
  39. Albert Einstein once said: “The hardest thing in the world to understand is the income tax.”f
  40. Alabama is the only state in the United States to impose a 10 playing card tax for decks of cards purchased in the state. In contrast, Nevada issues free decks of card with every tax return filed.f
  41. Denmark Cows Some EU nations tax cow flatulence
  42. Ireland, Denmark, and other EU nations have started to tax cattle owners on cow flatulence. The tax is $18 per cow in Ireland and $110 per cow in Denmark. They hope to curb greenhouse gases, of which cows are responsible for 18%.a
  43. In 2011, the IRS collected over $2.4 trillion from around 234 million tax returns (which included corporate, individual, and employment income tax returns). The IRS also provided approximately $416 billion in refunds.f
  44. The IRS estimates that in 2007, Americans who didn’t pay their taxes collectively owed more than $345 billion in taxes.m
  45. The Stamp Act of 1765 was the first tax imposed directly on the American colonies by England. The new tax required the American colonists pay a tax on every piece of printed paper they used.b
  46. The most famous protest of taxation by the America colonies was the Boston Tea Party. On December 16, 1773, colonists dumped 342 chests of tea into the Boston Harbor to protest the Tea Act and other oppressive tax measures. They argued there should be no “taxation without representation.”b
  47. WWII led to the creation of the Bureau of Internal Revenue, which later became the Internal Revenue Service (IRS). The IRS is the world’s largest accounting and tax-collection organization.b
  48. Biblical Israel split into two kingdoms after Solomon’s death in large part because his son the new king refused to cut taxes.b
  49. In Britain, Lady Godiva made her famous au naturel ride as a tax protest.b
  50. Rosetta stone The Rosetta stone is a tax-orientated document
  51. The Rosetta stone, the most significant relic of Egyptian history, is a tax-oriented document. It was inscribed around 200 B.C. during the reign of the boy-king Ptolemy V. It was so important that it was written in three languages. In fact, a large percentage of all ancient documents are tax records of one kind or another.b
  52. Cortez was able to defeat Montezuma largely because he incited a tax revolt among the peasants.b
  53. England rose to power under Elizabeth the Great in large part because of her low tax policies. Concomitantly, Spain was losing power because of the onerous tax and religious policies of her brother-in-law, King Philip.b
  54. The U.S. Civil War was not about slavery but mainly about taxation.b
  55. According to one historian, plane geometry was not invented by Euclid but by ancient tax collectors who wanted to determine land size for harvest taxes.b
  56. Tax evasion has been noted as an important contributing cause to the fall of the Roman Empire.b
  57. In 1787, U.S. citizens were eligible to vote only if they were taxpayers.b
  58. British 1816 newspapers A newspaper tax led to larger newspaper pages
  59. Newspapers have such large-sized sheets of paper because of a British 1816 tax on newspapers. The “knowledge tax” was levied by page. In response, newspapers started using larger paper size to accommodate more text, thereby reducing the number of pages taxed.b
  60. Historians note that tax laws have compromised citizens’ liberty more often than foreign invaders. Ultimately, all good tax systems tend to go bad.b
  61. After the Muslims conquered most of the lands of Judea in A.D. 636, they made tax refunds to Christians and Jews in Palestine. However, the Muslim tax system eventually rivaled the worst of the Roman Empire tax systems.b
  62. In Switzerland, William Tell shot the apple off his son’s head as punishment for tax resistance.b
  63. The first shots of the Civil War were fired at Fort Sumter, a Customs House.b
  64. Over the entrance to the IRS building in Washington D.C. is a quote by Oliver Wendell Holmes: “Taxes are what we pay for a civilized society.”b
  65. There is no known civilization that did not tax. Even the very first known civilization, the Sumerians, recorded their tax history on clay cones.b
  66. Taxes played a fundamental role in ancient international politics. Taxation was civilization’s most important enterprise. Life at all levels was a tax struggle.b
  67. An IRS agent anonymously wrote, “There is no important piece of information concerning you I am forbidden to seek.”b
  68. Zedekiah, king of the Jews, had his eyes put out by Nebuchadnezzar, king of Babylon, for his tax defiance. While religious historians see the defeats and suffering of the Jewish people as part of God’s plan, secular historians see them as a series of tax revolts throughout the centuries.b
  69. Historians note that the origins of Hanukkah are rooted in the tax struggles of the ancient Hebrews.b
  70. Christian Tax Islam’s growth was also due to its tax policies
  71. One historian notes that the key to Islam’s phenomenal growth was the use of taxation as an inducement to conversion. The pressure to convert came not from the sword as Christian polemicists misunderstand, but “rather from the purse.” Christians and Jews had to pay a special tax which Muslims were exempt from.b
  72. Medieval taxation in Europe was often based on a covenant between rulers and their subjects, with God as an important third party. Specifically, excessive tax collections were sins against God. However, because God allegedly did not protect Jews, they could be excessively taxed. Additionally, all the people and property within the holdings of the Catholic Church were subject to taxation by church rulers. Church clerics had equal or more taxing powers than the kings and nobles.b
  73. When Americans started paying annual federal income tax in 1913, they would save money in anticipation of paying a lump sum to the federal government. It wasn’t until WWII, when the government needed a more consistent stream of income to fund the war, that taxes started being withheld from paychecks.b
  74. The Cayman Islands do not impose income or property taxes on its citizens. Instead it raises money through import and export taxes, tourist fees, work permit fees, and transaction fees.f
  75. The fiscus judaicus (“Jewish tax”) started with the Romans after the destruction of Jerusalem in A.D. 70 and continued on and off in different forms and in different countries until after the Nazis.b
  76. Although some states recognize same-sex marriage, the federal government does not due to the 1996 Defense of Marriage Act. This can create more complex and frustrating taxes for same sex couples.f
  77. The largest tax evasion case in the history of the U.S. is the 2006 case of Walter Anderson, a telecommunications executive. Other famous tax cheats include mobster Al Capone, Girls Gone Wild creator Joe Francis, Wesley Snipes, and hotel operator Leona Helmsley, who once quipped, “We don’t pay taxes. Only the little people pay taxes.”i
    Top Ten American Companies Paying the Most Taxes (2012) h
    Company Income Tax Expense Earnings Before Taxes Revenue 1-Year Share Price Change Industry
    1. ExxonMobil $31.05 $78.73 $428.38 6.56% Oil and gas
    2. Chevron $20 $46.33 $222.58 9.52% Oil and gas
    3. Apple $14.21 $55.96 $164.69 -20.68% Computer hardware
    4. Wells Fargo $9.10 $28.47 $79.45 16.77% Banks
    5. Wal-Mart $7.98 $25.74 $469.16 21.87% Supermarkets
    6. ConocoPhillips $7.94 $15.42 $60.35 -22.86% Energy exploration and production
    7. JPMorgan $7.63 $28.92 $91.66 24.30% Financial services
    8. Berkshire Hathaway $6.92 $22.24 $162.46 31.01% Asset Management
    9. IBM $5.30 $21.90 $104.51 7.57% IT consulting
    10. Microsoft $4.57 $20.03 $72.93 -12.04% Software

    Top Ten Countries with the Highest Income Tax Rate (2012) c
    Country Income Tax Rate Amount at Which Top Marginal Tax Rate Starts
    1. Aruba 58.95% $171,149
    2. Sweden 56.6% $85,451 (574,300 kroners)
    3. Denmark 55.38% $70,633 (423,803 kroners)
    4. Netherlands 52% $70,090 (56,492 euros)
    5. (Tied) Austria 50% $74,442 (60,000 euros)
    5. (Tied) Belgium 50% $45,037 (36,300 euros)
    5. (Tied) Japan 50% $228,880 (18,000,000 yen)
    5. (Tied) United Kingdom 50% $234,484 (150,000 pounds)
    9. Finland 49% $87,222 (70,300 euros)
    10. Ireland 48% $40, 696 (32,801 euros)

-- Posted April 3, 2013

References

a “7 Crazy Taxes from the U.S. and Abroad.” TurboTAx. 2012. Accessed: March 22, 2013.

b Adams, Charles. 1993. For Good and Evil: The Impact of Taxes on the Course of Civilization. New York, NY: Madison Books.

c Curtin, Stacy. “Tax Rates: Does the U.S. Have the Highest in the World?” The Daily Ticker. August 7, 2012. Accessed: March 22, 2013.

d Erb, Keith Phillips. “9 Fun Tax Facts on Tax Day to Help Ease the Pain.” DailyFinance. April 15, 2010. Accessed: March 22, 2013.

e “The Joy of Tax.” The Economist. April 8, 2010. Accessed: March 22, 2013.

f La Bella, Laura. 2011. How Taxation Works. New York, NY: The Rosen Publishing Group, Inc.

g Marr, Chuck and Chye-Ching Huang. “Misconceptions and Realities about Who Pays Taxes.” Center on Budget and Policy Priorties.” September 17, 2012.

h McIntyre, Douglas. “Companies Paying the Most in Income Taxes.” USA Today. March 17, 2013. Accessed: March 22, 2013.

i Silver, Tisa. “5 Famous Tax Cheats.” Investopedia. January 26, 2010. Accessed: March 22, 2013.

j “Strange & Unusual Taxes throughout history from around the World.” eFile. Accessed March 22, 2013.

k “Unusual Tax Breaks, Tax Deductions, and Tax Exemptions.” eFile. Accessed March 22, 2013. Accessed: March 22, 2013.

l Weisenthal, Joe. “Tax Facts That Will Make Your Head Explode.” Business Insider.” April 13, 2010. Accessed: March 22, 2013.

m “What Is Tax Evasion and a List of Tax Cheaters.” eFile. Accessed March 22, 2013. Accessed: March 22, 2013.