Original Income Tax Form
Interociter has a picture of the first 1040 form, from 1913.
Did you know back then that not only was the top marginal rate only 4%, but you could write off rent, groceries, and clothing? Amazing what progress brings.
The form I use, the 1040ez is just as simple. Also, I believe (please correct me If I am wrong) that the standard deduction is designed to account for things like food, rent, sales taxes already paid...
Really? The standard deduction is below the poverty level. Nice. I'd rather have at it with the "real" numbers.
1040EZ is not available to most taxpayers. It's only available to single filers with no dependents and a relatively low maximum income level.
The standard deduction does not take into account sales tax paid, otherwise it would vary by the state.
The standard deduction is NOT supposed to include items like food or rent. It's supposed to be (sort of) an average of what most people would spend in deductible things, which are broadly medical expenses, interest, taxes, charity, casualty losses and expenses of employment.
Back in the olden days (before the tax "simplification" in 1986) you could deduct sales taxes. There was a published table that you could use to claim an average amount depending on where you lived and your gross income, or else you could accumulate your receipts and deduct the sales tax you actually paid if it was more than the table. If you did a lot of remodeling, for instance, you could easily go over the table amount.
That was one of the easy deductions that went out the window, along with credit card interest, when things were simplified. Things stayed simple for about as long as it took Congress to make new tax laws (about 20 minutes), thus ensuring continued and abundant employment for tax preparers, tax accountants, tax publishers and tax software producers.
The personal exemption is what is supposed to (sort of) take into account the fact that it costs money to sleep and eat. Ha ha, if only I could sleep and eat on $3,050 per year.
Note also that no one with an income under $3000 -- after deductions -- was taxed, which excluded almost everyone. And the rate was only 1% up to $20K. $20K in 1913 was an awful lot of money....
Ahhh.. back in the good old days eh? There is a certain amount of truth in the phrase, 'You get what you pay for', you know.
Let me get this straight. Since 1913, the personal exemption has skyrocketed from $3000 to $3050? Talk about your number in need of an inflation adjustment.
"You get what you pay for" is usually used in a context of choice. In this instance it's more like "they get what they make you pay for, and they want you to pay more."