08 Apr 10 Fun Facts to Honor the American Tax Day
Read on to celebrate some of the quirks and history of American Tax Day, which, we probably don’t need to remind you, is approaching on April 15. These 10 fun facts will lighten your mood as you consider the upcoming tax deadline.
1. There’s Free Food on Tax Day.
Many well-known restaurant chains offer free and discounted food on Tax Day. What do Hardee’s, Schlotzsky’s, Applebee’s, Red Lobster, Firehouse Subs, Burger King, The Halal Guys, Einstein Bros. Bagels, and Wendy’s have in common? They have all been known to offer free food on Tax Day! Check out sites like thrillist and offers.com to find out more.
2. The IRS and the Civil War are Historical Bedfellows.
The IRS was a byproduct of the Civil War. Both the national income tax and the IRS were foreseen as temporary measures to collect funds necessary to fight the war. The income tax was allowed to expire after 10 years (in 1972) but was reinstated with a constitutional amendment in 1913.
3. There was a Time When Only 1% of Americans Owed Income Taxes.
Remember the media storm that Mitt Romney created when he claimed that 47% of Americans didn’t pay income tax? If he’d campaigned a couple of generations earlier, he could have railed on the 99% of Americans who weren’t paying income tax. Before WWII, only 1% of working-age citizens filed a tax return. Americans were not skirting their tax duty; rather, the personal exemption rate at the time exempted all but the highest wage-earners.
4. A 2-Year-Old Pays More Taxes Than You.
Anyone in the US who earns more than $12,200 must file income taxes, and age is not a factor. Child actors, under-age app creators, prodigy gamers, and young YouTubers all bring in hard cash, and the government wants a share. Currently, 2-year-old Stormi Webster is considered the richest kid in America. Daughter of Kylie Jenner and Travis Scott, Stormi makes some of her earnings by appearing on the reality TV show Keeping up with the Kardashians. She also pockets earnings from several trademarks filed in her name.
5. The IRS Inspires Conspiracy Theories.
The most perennial conspiracy theories involving the IRS revolve around the notion that the IRS has been used by politicians to unfairly target their political enemies. Actually, in 2013, a congressional probe discovered that the IRS subjected conservative or conservative-sounding groups to extra scrutiny and audits. Groups associated with the Tea Party movement, deemed an up-and-coming political disruption, received the most harassment according to the investigation.
6. Even Albert Einstein Struggled to Understand Income Tax Rules.
Albert Einstein, the very man who has come to epitomize the intellectual power of the human mind, found the income tax return more difficult. According to the record, you might even say that he found income tax rules more difficult to decipher than theoretical physics. He once said, “The hardest thing in the world to understand is the income tax.” Einstein hired a tax professional, Leo Mattersdorf, to file his [Einstein’s] income tax return.
7. Everyone’s Favorite Tax Myth: Avoiding the Next Higher Tax Bracket Will Save You Money.
It’s a common fallacy that moving into the next higher tax bracket will net a taxpayer less money in the end. The United States uses marginal tax brackets, meaning that the higher rate only applies to the earnings that fall within that higher bracket. In other words, if your income exceeds a lower tax bracket by $10, then only the $10 is taxed at the higher rate. There is no reason to avoid earning money that will push your income just over the line into the next highest bracket. Many people mistakenly believe that if your earnings push you into a higher tax bracket, that all your income will be taxed at the higher rate.
8. The Highest Tax Bracket Has Been as High as 94%.
The highest tax bracket has been much higher in the past than the current rates. In 2020, the highest tax bracket was 37%. That might seem like a dream if you’d been an elite earner back in 1944. The Individual Income Tax Act of 1944 raised tax rates to their highest historical point, a whopping 94% for the top bracket. The 94% rate was actually lower than the rate originally proposed by President Franklin D. Roosevelt. After the attack on Pearl Harbor, Roosevelt proposed a 100% income tax for the nation’s top earners and appealed to their patriotism to support the nation at a point of extreme peril.
9. The IRS Will Pay You Reward Money if You Help Them.
The IRS rewards whistleblowers who alert the agency to individuals or companies that are avoiding taxes. In fact, the IRS has offered to pay 30% of the collected taxes and fees to the whistleblower as a reward. If you alert the IRS to someone who owes $50,000 in back-taxes and another $30,000 in fees and interest, then you’ll be pocketing a pretty $24,000. Time to go hang out on a beach in Monaco and meet some tax-evading ex-pats?
10. Taxes are a Weapon in American’s Culture Wars
Items that are deemed necessities such as groceries and medication are exempt from taxes, while items that are deemed elective are subject to full taxes. Why, then, are feminine hygiene products taxed more like luxury items than like necessities? Deciding which products and organizations are tax-exempt is a topic that lands directly in the middle of the nation’s culture wars. Should a men’s service club be tax-exempt if they don’t allow immigrants to join? Should a church be tax-exempt if they don’t allow women to lead? Should a Muslim school be tax-exempt if some teachers have ties to terrorist groups in the Middle East? Should wealthy people be able to gift their children thousands of dollars tax-free? Deciding what to tax reflects our nation’s historical values and biases.
Now you know a few more things about tax day, but if resolving back taxes is still a puzzle to you, contact our tax relief attorneys. They can help you resolve any outstanding debt in the most financially advantageous way possible so that you can move forward free of the burden.