by Patty Lamberti 
The Rotarian -- April 2013  

Taxes date as far back as ancient Egypt. One hieroglyphic tablet shows tax collectors beating peasants who didn’t pay on time.

On 16 December 1773, about 100 colonists destroyed tea on three British ships docked in Boston Harbor. The British government had implemented a tax on tea imported into the colonies. The “tea party” instigators were primarily protesting a lack of representation in British parliament, in addition to the price of tea.

States needed to pay their debts after the American Revolution. The newly formed federal government imposed excise taxes on tobacco and alcohol. Pennsylvania farmers revolted in 1794, in what became known as the Whiskey Rebellion. Today, the federal tax on a 750-milliliter bottle of 80-proof liquor is $2.14. The federal tax on a pack of cigarettes is $1.01.

In 1861, Congress passed the first income tax law in an effort to help cover the cost of the Civil War. The law was later repealed. In 1913, the 16th Amendment to the Constitution was ratified, creating the first permanent federal income tax. In 2011, 24.9 percent of federal income tax payments went toward the national defense budget.

The first U.S. 1040 tax form was created in 1913. Today, the Internal Revenue Service offers a total of 1,177 forms and instructions. Of the 93,337 employees who worked for the IRS at the end of fiscal year 2009, only 14,264 were revenue agents.

Tax Freedom Day – the day when “the nation as a whole has earned enough money to pay off its total tax bill for the year,” calculated by the Tax Foundation, a nonpartisan tax research group – hasn’t occurred earlier than 31 March since 1950.

To pay their taxes for 2012, 35 percent of Americans used tax software, 31 percent relied on websites that calculate taxes, 28 percent hired an accountant, 1 percent used a cell phone app, and 5 percent did it the old way: with a pen and paper.

The maximum federal tax rate for a U.S. citizen in 2012 was 35 percent. Aruba has the world’s highest rate, at 59 percent, followed by Sweden, at 56.6 percent. People who live in the Bahamas, Bahrain, Bermuda, Brunei, the Cayman Islands, Kuwait, Oman, Qatar, Saudi Arabia, and the United Arab Emirates pay no income taxes. 

In 2011, 84 percent of Americans did not think cheating on taxes was acceptable. About 1 in 90 of all individual U.S. tax returns were audited that year. The IRS charges a 20 percent “negligence” penalty for careless mistakes on tax returns, but if the agency believes a taxpayer committed fraud, it can charge 75 percent of the tax owed and send the person to jail for five years.