Thursday, October 3, 2013

100th Anniversary of the Federal Income Tax

Today is the 100th anniversary of the federal income tax, which was enacted on October 3, 1913.  The New York Times has more.

The 1913 income tax applied to people who made more than the $3,000 personal exemption (around $71,000 in  today's dollars), and the first 1% rate applied to taxable income of between $0 and $20,000 (around $472,000 today).  The top tax bracket of 7% applied to people with taxable income of over $500,000 (around $12 million today). 

Today, the top tax bracket of 39.6% applies to people with taxable income of over $400,000.

Coincidentally, the Federal Reserve was also created in 1913, with the authority to issue paper money, among other things.

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