(ThyBlackMan.com) As an employee in the 21st century, you can do your tax return online and then forget about it again until next July. It’s amazing to think that this streamlined, technological process started more than 5,000 years ago, with Egyptians handing over a fifth of their harvest to the Pharaoh.
As boring as most of us find the subject, taxation has had a long and fascinating history that involves adventures all over the world. Today, let’s take a look at some of the highlights of its journey through the United States of America.
1. You can blame West Virginia for sales taxes
We’re sure sales taxes would have been adopted at some point anyway, but still, it’s nice to have someone to blame. The first sales taxes in America were introduced in West Virginia in 1921, and many other states soon followed suit. Alaska, Oregon, Montana, New Hampshire, and Delaware are so late to the party that they still haven’t imposed sales taxes.
2. The Revolutionary War simultaneously abolished and brought in taxes
America famously gained its freedom from the British Empire through the Revolutionary War. Taxation played a significant role in triggering the war as the Brits had been imposing heavy taxes on the new colonies for everything from real estate to tea.
While the Revolutionary War freed America from the demands of the British Empire, the constitution brought with it a centralized government, complete with the ability to impose taxes on its people. The first taxes to roll out after the war were excise taxes on goods and services.
3. America got tax-happy in the 20th century
Many new taxes were brought in across America during these decades, including corporate income taxes, federal income tax, the modern iteration of the estate tax, gift tax, the aforementioned sales taxes, social security taxes, and the alternative minimum tax (AMT).
The federal income tax was brought in to help fund World War I, but the government had no intentions of rolling it back once the war was over. Estate taxes, by contrast, came and went between the 1700s and early 1900s, brought in to fund war efforts, and then rolled back when not needed.
4. Americans pay dearly for their sins
Every time you buy a packet of cigarettes or a bottle of wine, you’re paying the government for the privilege of indulging your guilty pleasures. These “sin taxes” have been around for centuries, but in the US, they weren’t initially brought in for the purpose of discouraging people from consuming harmful substances. Instead, they were enacted to recoup money after the Civil War. It was only over time that the government began using these taxes to limit drinking and smoking by adding a financial penalty to the habits.
5. Loans are a better deal than tax for wealthy Americans
In modern-day America, a complex web of tax laws and interest rates have created a system in which the wealthiest people in the country (and indeed, on the planet) can gain billions of dollars in wealth but pay little to no interest. That’s because their annual growth wasn’t created by a taxable income.
To finance their lavish lifestyles, billionaires like Jeffrey Bezos and Elon Musk take out loans against their assets that come with interest rates that are lower than the tax they would pay if they cashed out their stocks or sold their real estate.
From the constitution to cigarettes, tea-based rebellions to space-cowboy billionaires, the facts above prove that the story of taxation in America is far more interesting than most of us imagine.
Staff Writer; Jerry Moore
