Revenue Act of 1913
The Revenue Act of 1913 known as the Underwood Tariff or the Underwood-Simmons Act, re-established a federal income tax in the United States and lowered tariff rates. The act was sponsored by Representative Oscar Underwood, passed by the 63rd United States Congress, signed into law by President Woodrow Wilson. Wilson and other members of the Democratic Party had long seen high tariffs as equivalent to unfair taxes on consumers, tariff reduction was President Wilson's first priority upon taking office. Following the ratification of the Sixteenth Amendment in 1913, Democratic leaders agreed to seek passage of a major bill that would lower tariffs and implement an income tax. Underwood shepherded the revenue bill through the House of Representatives, but the bill won approval in the United States Senate only after extensive lobbying by the Wilson administration. Wilson signed the bill into law on October 3, 1913; the Revenue Act of 1913 lowered average tariff rates from 40 percent to 26 percent.
It established a one percent tax on income above $3,000 per year. A separate provision established a corporate tax of one percent, superseding a previous tax that had only applied to corporations with net incomes greater than $5,000 per year. Though a Republican-controlled Congress would raise tariff rates, the Revenue Act of 1913 marked an important shift in federal revenue policy, as government revenue would rely on income taxes rather than tariff duties. Democrats had long seen high tariff rates as equivalent to unfair taxes on consumers, tariff reduction was President Wilson's first priority upon taking office, he argued that the system of high tariffs "cuts us off from our proper part in the commerce of the world, violates the just principles of taxation, makes the government a facile instrument in the hands of private interests." While most Democrats were united behind a decrease in tariff rates, most Republicans held that high tariff rates were useful for protecting domestic manufacturing and factory workers against foreign competition.
Shortly before Wilson took office, the Sixteenth Amendment, proposed by Congress in 1909 during a debate over tariff legislation, was ratified by the requisite number of states. Following the ratification of the Sixteenth Amendment, Democratic leaders agreed to attach an income tax provision to their tariff reduction bill to make up for lost revenue, to shift the burden of funding the government towards the high earners that would be subject to the income tax. By late May 1913, House Majority Leader Oscar Underwood had passed a bill in the House that cut the average tariff rate by 10 percent. Underwood's bill, which represented the largest downward revision of the tariff since the Civil War, aggressively cut rates for raw materials, goods deemed to be "necessities," and products produced domestically by trusts, but it retained higher tariff rates for luxury goods; the bill instituted a tax on personal income above $4,000. Passage of Underwood's tariff bill in the Senate would prove more difficult than in the House because some Southern and Western Democrats favored the continued protection of the wool and sugar industries, because Democrats had a narrower majority in that chamber.
Seeking to marshal support for the tariff bill, Wilson met extensively with Democratic senators and appealed directly to the people through the press. After weeks of hearings and debate and Secretary of State William Jennings Bryan managed to unite Senate Democrats behind the bill; the Senate voted 44 to 37 in favor of the bill, with only one Democrat voting against it and only one Republican, progressive leader Robert M. La Follette Sr. voting for it. Wilson signed the Revenue Act of 1913 into law on October 3, 1913; the Revenue Act of 1913 reduced the average import tariff rates from 40 percent to 26 percent. The Act established the lowest rates since the Walker Tariff of 1857. Most schedules were a percentage of the value of the item; the duty on woolens went from 56% to 18.5%. Steel rails, raw wool, iron ore, agricultural implements now had zero rates; the reciprocity program wanted by the Republicans was eliminated. Congress rejected proposals for a tariff board to fix rates scientifically, but it set up a study commission.
The Underwood-Simmons measure vastly increased the free list, adding woolens, steel, farm machinery, many raw materials and foodstuffs. The average rate was 26%; the Revenue Act of 1913 restored a federal income tax for the first time since 1872. The federal government had adopted an income tax in the Wilson–Gorman Tariff Act, but that tax had been struck down by the Supreme Court in the case of Pollock v. Farmers' Loan & Trust Co; the Revenue Act of 1913 imposed a one percent tax on incomes above $3,000, with a top tax rate of six percent on those earning more than $500,000 per year. Three percent of the population was subject to the income tax; the bill included a one percent tax on the net income of all corporations, superseding a previous federal tax that had only applied to corporate net incomes above $5,000. The Supreme Court upheld the constitutionality of the income tax in the cases of Brushaber v. Union Pacific Railroad Co. and Stanton v. Baltic Mining Co. A normal income tax and an additional tax were levied against the net income of individuals, as shown in the following table: There was an exemption of $3,000 for single filers and $4,000 for married couples.
Therefore, the 1% bottom marginal rate applied only to the first $17,000 of income for single filers or the first $16,000 ($352,300 in
An income tax is a tax imposed on individuals or entities that varies with respective income or profits. Income tax is computed as the product of a tax rate times taxable income. Taxation rates may vary by type or characteristics of the taxpayer; the tax rate may increase as taxable income increases. The tax imposed on companies is known as corporate tax and is levied at a flat rate. However, individuals are taxed at various rates according to the band. Further, the partnership firms are taxed at flat rate. Most jurisdictions exempt locally organized charitable organizations from tax. Capital gains may be taxed at different rates than other income. Credits of various sorts may be allowed that reduce tax; some jurisdictions impose the higher of an income tax or a tax on an alternative base or measure of income. Taxable income of taxpayers resident in the jurisdiction is total income less income producing expenses and other deductions. Only net gain from sale of property, including goods held for sale, is included in income.
Income of a corporation's shareholders includes distributions of profits from the corporation. Deductions include all income producing or business expenses including an allowance for recovery of costs of business assets. Many jurisdictions allow notional deductions for individuals, may allow deduction of some personal expenses. Most jurisdictions either do not tax income earned outside the jurisdiction or allow a credit for taxes paid to other jurisdictions on such income. Nonresidents are taxed only on certain types of income from sources within the jurisdictions, with few exceptions. Most jurisdictions require self-assessment of the tax and require payers of some types of income to withhold tax from those payments. Advance payments of tax by taxpayers may be required. Taxpayers not timely paying tax owed are subject to significant penalties, which may include jail for individuals or revocation of an entity's legal existence; the concept of taxing income is a modern innovation and presupposes several things: a money economy, reasonably accurate accounts, a common understanding of receipts and profits, an orderly society with reliable records.
For most of the history of civilization, these preconditions did not exist, taxes were based on other factors. Taxes on wealth, social position, ownership of the means of production were all common. Practices such as tithing, or an offering of first fruits, existed from ancient times, can be regarded as a precursor of the income tax, but they lacked precision and were not based on a concept of net increase; the first income tax is attributed to Egypt. In the early days of the Roman Republic, public taxes consisted of modest assessments on owned wealth and property; the tax rate under normal circumstances was 1% and sometimes would climb as high as 3% in situations such as war. These modest taxes were levied against land and other real estate, animals, personal items and monetary wealth; the more a person had in property, the more tax they paid. Taxes were collected from individuals. In the year 10 AD, Emperor Wang Mang of the Xin Dynasty instituted an unprecedented income tax, at the rate of 10 percent of profits, for professionals and skilled labor.
He was overthrown 13 years in 23 AD and earlier policies were restored during the reestablished Han Dynasty which followed. One of the first recorded taxes on income was the Saladin tithe introduced by Henry II in 1188 to raise money for the Third Crusade; the tithe demanded that each layperson in England and Wales be taxed one tenth of their personal income and moveable property. The inception date of the modern income tax is accepted as 1799, at the suggestion of Henry Beeke, the future Dean of Bristol; this income tax was introduced into Great Britain by Prime Minister William Pitt the Younger in his budget of December 1798, to pay for weapons and equipment for the French Revolutionary War. Pitt's new graduated income tax began at a levy of 2 old pence in the pound on incomes over £60, increased up to a maximum of 2 shillings in the pound on incomes of over £200. Pitt hoped that the new income tax would raise £10 million a year, but actual receipts for 1799 totalled only a little over £6 million.
Pitt's income tax was levied from 1799 to 1802, when it was abolished by Henry Addington during the Peace of Amiens. Addington had taken over as prime minister in 1801, after Pitt's resignation over Catholic Emancipation; the income tax was reintroduced by Addington in 1803 when hostilities with France recommenced, but it was again abolished in 1816, one year after the Battle of Waterloo. Opponents of the tax, who thought it should only be used to finance wars, wanted all records of the tax destroyed along with its repeal. Records were publicly burned by the Chancellor of the Exchequer, but copies were retained in the basement of the tax court. In the United Kingdom of Great Britain and Ireland, income tax was reintroduced by Sir Robert Peel by the Income Tax Act 1842. Peel, as a Conservative, had opposed income tax in the 1841 general election, but a growing budget deficit required a new source of funds; the new income tax, based on Addington's model, was imposed on incomes above £150. Although this measure was intended to be temporary, it soon became a fixture of the British taxation system.
A committee was formed in 1851 under Joseph Hume to investigate the matter, but failed to reach a clear recommendation. Despite the vociferous objection, William Gladstone, Chancellor of the Exchequer from 1852, kept the prog
United States Congress
The United States Congress is the bicameral legislature of the Federal Government of the United States. The legislature consists of two chambers: the House of the Senate; the Congress meets in the United States Capitol in Washington, D. C.. Both senators and representatives are chosen through direct election, though vacancies in the Senate may be filled by a gubernatorial appointment. Congress has 535 voting members: 100 senators; the House of Representatives has six non-voting members representing Puerto Rico, American Samoa, the Northern Mariana Islands, the U. S. Virgin Islands, the District of Columbia in addition to its 435 voting members. Although they cannot vote in the full house, these members can address the house and vote in congressional committees, introduce legislation; the members of the House of Representatives serve two-year terms representing the people of a single constituency, known as a "district". Congressional districts are apportioned to states by population using the United States Census results, provided that each state has at least one congressional representative.
Each state, regardless of population or size, has two senators. There are 100 senators representing the 50 states; each senator is elected at-large in their state for a six-year term, with terms staggered, so every two years one-third of the Senate is up for election. To be eligible for election, a candidate must be aged at least 25 or 30, have been a citizen of the United States for seven or nine years, be an inhabitant of the state which they represent; the Congress was created by the Constitution of the United States and first met in 1789, replacing in its legislative function the Congress of the Confederation. Although not mandated, in practice since the 19th century, Congress members are affiliated with the Republican Party or with the Democratic Party and only with a third party or independents. Article One of the United States Constitution states, "All legislative Powers herein granted shall be vested in a Congress of the United States, which shall consist of a Senate and House of Representatives."
The House and Senate are equal partners in the legislative process—legislation cannot be enacted without the consent of both chambers. However, the Constitution grants each chamber some unique powers; the Senate ratifies treaties and approves presidential appointments while the House initiates revenue-raising bills. The House initiates impeachment cases. A two-thirds vote of the Senate is required before an impeached person can be forcibly removed from office; the term Congress can refer to a particular meeting of the legislature. A Congress covers two years; the Congress ends on the third day of January of every odd-numbered year. Members of the Senate are referred to as senators. Scholar and representative Lee H. Hamilton asserted that the "historic mission of Congress has been to maintain freedom" and insisted it was a "driving force in American government" and a "remarkably resilient institution". Congress is the "heart and soul of our democracy", according to this view though legislators achieve the prestige or name recognition of presidents or Supreme Court justices.
One analyst argues that it is not a reactive institution but has played an active role in shaping government policy and is extraordinarily sensitive to public pressure. Several academics described Congress: Congress reflects us in all our strengths and all our weaknesses, it reflects our regional idiosyncrasies, our ethnic and racial diversity, our multitude of professions, our shadings of opinion on everything from the value of war to the war over values. Congress is the government's most representative body... Congress is charged with reconciling our many points of view on the great public policy issues of the day. Congress is changing and is in flux. In recent times, the American south and west have gained House seats according to demographic changes recorded by the census and includes more minorities and women although both groups are still underrepresented. While power balances among the different parts of government continue to change, the internal structure of Congress is important to understand along with its interactions with so-called intermediary institutions such as political parties, civic associations, interest groups, the mass media.
The Congress of the United States serves two distinct purposes that overlap: local representation to the federal government of a congressional district by representatives and a state's at-large representation to the federal government by senators. Most incumbents seek re-election, their historical likelihood of winning subsequent elections exceeds 90 percent; the historical records of the House of Representatives and the Senate are maintained by the Center for Legislative Archives, a part of the National Archives and Records Administration. Congress is directly responsible for the governing of the District of Columbia, the current seat of the federal government; the First Continental Congress was a gathering of representatives from twelve of the thirteen British Colonies in North America. On July 4, 1776, the Second Continental Congress adopted the Declaration of Independence, referring to the new nation as the "United States of America"; the Articles of Confederation in 1781 created the Congress of the Confederation, a
Revenue Act of 1926
The United States Revenue Act of 1926, 44 Stat. 9, reduced inheritance and personal income taxes, cancelled many excise imposts, eliminated the gift tax and ended public access to federal income tax returns. Passed by the 69th Congress, it was signed into law by President Calvin Coolidge; the act was applicable to incomes for 1925 and thereafter. A rate of 13.5 percent was levied on the net income of corporations. A normal tax and a surtax were levied against the net income of individuals as shown in the following table. Exemption of $1,500 for single filers and $3,500 for married couples and heads of family. A $400 exemption for each dependent under 18
Commissioner of Internal Revenue
The Commissioner of Internal Revenue is the head of the Internal Revenue Service, an agency within the United States Department of the Treasury. The office of Commissioner was created by Congress by the Revenue Act of 1862. Section 7803 of the Internal Revenue Code provides for the appointment of a Commissioner of Internal Revenue to administer and supervise the execution and application of the internal revenue laws; the Commissioner is appointed by the President, with the consent of the Senate, for a five-year term. The current commissioner is Charles P. Rettig; the Commissioner's duties include administering, conducting and supervising "the execution and application of the internal revenue laws or related statutes and tax conventions to which the United States is a party" and advising the President on the appointment and removal of a Chief Counsel of the IRS. Treasury Order 150-10 states in relevant part: "The Commissioner of Internal Revenue shall be responsible for the administration and enforcement of the Internal Revenue laws."
The Commissioner reports to the Secretary of the Treasury through the Deputy Secretary of the Treasury. One of the Commissioner's most important responsibilities with respect to the internal revenue laws involves prescribing Treasury Regulations administered by the IRS; the U. S. Treasury Regulations provide: Issuance. --The Commissioner, with the approval of the United States Secretary of the Treasury, or his delegate, shall prescribe all needful rules and all rules and regulations as may be necessary by reason of any alteration of law in relation to internal revenue. However, the General Counsel of the Department of the Treasury has "the authority to approve all regulations pertaining to the internal revenue laws, including the authority to ratify and approve, where necessary, any such regulations issued."By law, the Commissioner is part of the "federal law enforcement community." The following lists Commissioners of Internal Revenue, in chronological order
United States Statutes at Large
The United States Statutes at Large referred to as the Statutes at Large and abbreviated Stat. are an official record of Acts of Congress and concurrent resolutions passed by the United States Congress. Each act and resolution of Congress is published as a slip law, classified as either public law or private law, designated and numbered accordingly. At the end of a Congressional session, the statutes enacted during that session are compiled into bound books, known as "session law" publications; the session law publication for U. S. Federal statutes is called the United States Statutes at Large. In that publication, the public laws and private laws are numbered and organized in chronological order. U. S. Federal statutes are published in a three-part process, consisting of slip laws, session laws, codification. Large portions of public laws are enacted as amendments to the United States Code. Once enacted into law, an Act will be published in the Statutes at Large and will add to, modify, or delete some part of the United States Code.
Provisions of a public law that contain only enacting clauses, effective dates, similar matters are not codified. Private laws are not codified; some portions of the United States Code have been enacted as positive law and other portions have not been so enacted. In case of a conflict between the text of the Statutes at Large and the text of a provision of the United States Code that has not been enacted as positive law, the text of the Statutes at Large takes precedence. Publication of the United States Statutes at Large began in 1845 by the private firm of Little and Company under authority of a joint resolution of Congress. During Little and Company's time as publisher, Richard Peters, George Minot, George P. Sanger served as editors. In 1874, Congress transferred the authority to publish the Statutes at Large to the Government Printing Office under the direction of the Secretary of State. Pub. L. 80–278, 61 Stat. 633, was enacted July 30, 1947 and directed the Secretary of State to compile, edit and publish the Statutes at Large.
Pub. L. 81–821, 64 Stat. 980, was enacted September 23, 1950 and directed the Administrator of General Services to compile, edit and publish the Statutes at Large. Since 1985 the Statutes at Large have been prepared and published by the Office of the Federal Register of the National Archives and Records Administration; until 1948, all treaties and international agreements approved by the United States Senate were published in the set, but these now appear in a publication titled United States Treaties and Other International Agreements, abbreviated U. S. T. In addition, the Statutes at Large includes the text of the Declaration of Independence, Articles of Confederation, the Constitution, amendments to the Constitution, treaties with Indians and foreign nations, presidential proclamations. Sometimes large or long Acts of Congress are published as their own "appendix" volume of the Statutes at Large. For example, the Internal Revenue Code of 1954 was published as volume 68A of the Statutes at Large.
Revised Statutes of the United States Procedures of the United States Congress Enrolled Bill Federal Register United States Reports California Statutes Laws of Florida Laws of Illinois Laws of New York Laws of Pennsylvania This article incorporates public domain material from websites or documents of the U. S. Government Publishing Office. How Our Laws Are Made, by the Parliamentarian of the House of Representatives. Volumes 1 to 18 of the Statutes at Large made available by the Library of Congress Volumes 1 to 64 of the Statutes at Large made available by the Congressional Data Coalition via LEGISWORKS.org Volumes 65 to 125 of the Statutes at Large made available by the GPO and the Library of Congress via FDsys Sortable by Bills Enacted into Laws, Concurrent Resolutions, Popular Names, Presidential Proclamations, or Public Laws. Volumes 1–124 of the Statutes at Large made available by the Constitution Society Public and private laws from 104th Congress to present from the Government Printing Office, in slip law format with Statutes at Large page references Early United States Statutes includes Volumes 1 to 44 of the Statutes at Large in DjVu and PDF format, along with rudimentary OCR of the text.
United States Statutes and the United States Code: Historical Outlines, Lists and Sources from the Law Librarians' Society of Washington, DC Second Edition of the Revised Statutes of the United States