BY ED HUNGNESS
Special to the Record Eagle
April 14, 2008 04:00 am This week, when I drive down our road, I might see lights burning late into the night in many of the homes I pass. If my hearing were better, I would probably pick up the sound of calculators and adding machines chugging away well into the wee hours. We are fast approaching that delightful time of the year when our income tax return is due. Don't despair or feel alone. Take comfort in the fact that folks just like us have been facing this daunting task since 1913. Ninety-five years ago, Congress ratified the 16th Amendment to the United States Constitution, which states that "The Congress shall have power to lay and collect taxes on incomes, from whatever source derived, without apportionment among several States, and without regards to any census or enumeration." What that really means is they are going to take part of your paycheck and there's not much you can do about it. In 1913, the tax rate ranged from 1 percent to 7 percent depending on your income. The 7 percent rate didn't kick in unless you made more than $500,000 per year and few were making six figures in 1913. Most families were in the 1 percent bracket. In contrast, we currently pay anywhere from 10 percent to 35 percent. Depending on who wins the next election will determine where we go from these levels. Before 1913, the federal government collected revenue in order to fund its operation. It is interesting how most of the tax money resulted from trade tariffs rather than from the individual. These tariffs were collected from foreigners who wanted to do business in the United States. What a novel idea! Maybe we should look backward for some of our "new" ideas. Granted, government was much smaller then and required much less to sustain itself. But, just like my waistline, it has grown with age. In 1913, total federal spending was less than $1 billion. Today it is estimated to top $2.9 trillion. When I bought my first computer, I decided to do my own tax preparation using one of the programs that came in a box. I could see myself saving all kinds of money, like when I fix my own leaky faucet. I struggled through the process for several years and wound up having a lot of conversations with the box. I had this vision of two guys dressed in trench coats and dark glasses knocking at my door during the middle of the night. About five years ago, I finally realized that it was next to impossible to keep up with all the changes in the rules, and the resulting frustration was more than an old guy should have to deal with. As I walked into the accountant's office, I saw a sign hanging on the wall that more or less summed up the whole matter. It simply stated, "Two Things You Can Count On: Death and Taxes." I sleep much better now knowing that I don't have to face this annual chore alone. Some things are best left to the young guys. Myself, I'd rather go fishin'. Ed Hungness and his wife owned their cottage on Fife Lake for six years before moving there after his retirement in 2005. His writing draws from life experiences and a love for the outdoors and northern Michigan. He can be reached at edhungness@yahoo.com or care of the Record-Eagle.
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Ed Hungness