Paying taxes is a process that has been a part of American lives since the 1800s. Have you ever wondered how the process all began? You would be surprised to understand how everything came to be. Learn when taxes were introduced, how the income tax began and how the process has evolved from your local Denver tax specialist.
When were taxes first introduced?
Taxes were first introduced to Americans in the late 1700s, but it was on a much smaller scale than what we know today. Some of the early areas that were taxed included stamps, newspapers, imports, sugar, clothing, coffee and tea. However, major taxes were not introduced until the 1800s, which was a very different layout than what we know today in terms of taxation. Many of these taxes stemmed from The Revenue Act of 1862. According to the IRS, The Estate Tax: Ninety Years and Counting
provided much of the federal budget. What is surprising is this was just the beginning of what we come to know as the tax system today that at the time, supplied so much of the budget. The IRS adds that the Revenue Tax Act had many other elements included within it. It introduced legacy taxes on personal property, estates, charities and more.
How the income tax began
While there were taxes in place prior to the income tax, the system we know today took in the early 1900s. Income taxes were not put into place within the American tax system in 1913. The idea was first generated in the late 1800s and it was ratified in 1913 with the 16
th Amendment. This tax helped provide funding for World War I. During these early years of the income tax, the rich was the top class of people that had to pay. It wasn’t until the early 1940s when the income tax changed from a tax on the rich to a tax that everyone in America had to pay.
The need for accountants
Accountants played a huge part of the transition of the tax system. Once taxes were introduced in the late 1800s, the need for accountants grew and the certified public accountant position was created. According to Investopedia’s Accounting Basics: History of Accounting
, the American Association of Public Accountants was created in 1887 with 31 members. They added that standardized testing for these individuals was rolled out in 1896. The name of this group evolved into the American Institute of Certified Public Accountants in 1957. Over the years, more and more committees around the country.
Today, there is such a need for quality accountants thanks to the current tax laws. It can be a lot to manage on one’s own, whether it be your personal taxes or small business. Block, Rothman and Associates if your premier tax preparation and tax resolution specialist. For a help on your own, try some of these quality budgeting tips from your Denver accountant
. For help with any of your tax questions, we can help! Call us at 303-321-7160 to get started.