Need a break from your taxes? It can be a boring and tiring process, but these interesting facts might make it a little more enjoyable!
1. Much of America’s early history was tax-free.
You likely have already heard things like this
over the years or back in high school history class but do you know why taxes
came about? Taxes were not a new thing, they had been around for millennia, but
for America, it was something of a slow, evolutionary process. The early American government took a cautious
approach to taxes because one of the reasons Americans revolted against the
British was because of taxation.
One of the main reasons for their implementation was because of war. For example, income tax wasn’t introduced until after the Civil War. The expense of the war was great and the government saw it as one of the only ways out of the rubble of war and back to financial stability. The government passed the Revenue Act of 1861 which led to the modern tax system we see today and the United States Internal Revenue Service (IRS) was born.
2. Less than 1% of tax returns get audited.
This is not an encouragement to lie on your tax return because you are so unlikely to be audited, it’s just a little surprising. To be fair, 1% of the American population is still around 3 million people… an impressive number, but comparatively still a small group. Audits are not a very fun process either, in fact even when one has nothing to hide, it can still be a stressful event. Take this statistic as something of a breath of fresh air knowing that it is very unlikely to be you.
3. The Egyptians May Have Invented Taxes
Egyptian pyramid and sphynx in the
No one knows who invented taxes, but the
earliest history we have of them comes from the early Egyptians. Around 3000
B.C. the King of Egypt began going around his Kingdom to determine what he was
owed. This later evolved into what some call the Egyptian Cattle Count which
was an assessment of the farms and crops of the land.
The taxes developed in Egypt are what eventually paid for the Great Pyramids, Sphynx, and other monuments to be built and maintained. Of course, slavery and oppression helped with this process as well, but nonetheless, taxes paid for much of the needed materials.
4. The Rosetta Stone Says What?!
Whether you are a professional linguist or have Duolingo downloaded on your phone, you’ve likely heard of the Rosetta Stone. It was discovered by some French as part of Napolean’s campaign in Egypt and contains 3 versions of the same message in 3 different languages. The Stone allowed for the translation of hieroglyphics; a mystery that boggled archeologists and historians up until the 19th century. What is even more interesting, it that the Rosetta Stone’s message is about tax adjustments. Guess the Cattle Count couldn’t last forever.
5. Can you tax sunlight?
In the UK, there used to be something called a “window tax.” The idea behind the window tax was to adjust how much the wealthy vs. the poor paid in taxes. The more windows you had on your home must have meant the more money you earned, therefore a larger tax was dealt. This is similar to the tax brackets we have in the U.S. today; depending on what you make depends how much you owe in taxes. This method lasted … but you can imagine the tax evasion tactics that might have been used, like boarding up all the windows and so forth.
6. Cryptocurrency = Property, ≠ Currency
Golden Bitcoin standing on a circuit
Another non-physical item we tax is cryptocurrency, but unlike sunlight, it’s a relatively new idea. Cryptocurrency has a short history with Bitcoin having only been around for about a decade now. The virtual currency has forced some modifications to tax codes and if you are a trader, those are very important to be aware of.
The reasoning for reporting cryptocurrency as property and not currency makes it easier to report and track for the IRS. With all kinds of exchange rates and transactions, it can get extremely complicated. Many believe that the new monetary system and technology will be the next defining feature of the distant future. Its popularity and growth are on the rise and don’t show any signs of slowing down.
7. If I had a dollar for every page of the tax code…
Finally, I’d just like to let you know that the U.S. tax code is NOT 70,000 pages long. This is a myth that somehow appears in every google search about the tax code. Can you even imagine what a 70,000-page book would look like? According to an attorney at Congress’ Joint Committee on Taxation, it’s only about 2,600 pages long. That’s quite a difference. Still, if you’re looking for some light reading to fill your spare time, here is a read that is only half as long as the entire Harry Potter series. We all have our opinions about taxes, but they are part of life and the next time you dread doing your taxes, just be grateful you don’t have to read the entire U.S. tax code.