Who are these folks who carry laptop computers and walk briskly from their cozy living rooms?
Instead of watching the latest TV offering or lolling in bed an extra snooze hour, they head for the TaxAide site. Entering the south entrance to the Eagle Plaza by the DSNWK, that person might be your neighbor or the person you saw pushing the grocery cart down the aisle at the supermarket last week. So how can that person possibly understand your tax burden information and the appropriate way to fill in all those spaces that glare up at you as if daring you to make a mistake?
There are two things that we know are certain: death and taxes. Well, let's skip over the first one and look at how our income tax came about and then how we might better manage the payment of "taxes."
Taxes have caused distress even before our independence from England when we protested "taxation without representation." Taxes have always been levied to meet changing needs in our history such as wars and increased response of government to societal demand. They probably will change again this year because of our economic problems.
In the early days of our independence, the Articles of Confederation, adopted in 1781, reflected fear of a central government that was too strong. As a result, states retained much of the political power to tax. The early national government had few responsibilities and no nationwide tax system, so it depended on donations from the states for revenue. Under the articles, each state could determine the tax to be levied. This did not make for a strong nation, so in 1789, the founding fathers empowered Congress in Article 1, Section 8 of the Constitution to "lay and collect taxes, duties, imposts, and excises, pay the Debts and provide for the common Defense and general Welfare of the United States; but all Duties, Imposts and Excises shall be uniform throughout the United States ..."
Many Americans still opposed and resisted what they thought was unfair or improper taxation. President George Washington sent federal troops to enforce the federal government's revenue laws because of the Whiskey Rebellion in 1794. Soon after this, direct taxes were imposed. This was a recurring tax paid directly to the government by the taxpayer who owned houses, land, slaves and estates. President Thomas Jefferson, elected in 1802, abolished the direct tax. For the next 10 years there were no internal revenue taxes other than some excise taxes on nonessential consumer goods. Additional excise taxes were raised for the War of 1812 and were repealed by Congress in 1817.
The Civil War brought about the need for the Revenue Act of 1861, which restored earlier excise taxes and a new tax -- the income tax. More revenue was needed, so on July 1, 1862, Congress created a commissioner of internal revenue and passed new and more extensive excise taxes as well as taxes on many legal documents and professional license fees.
The two-tiered rate structure and a standard deduction and deductions for rental housing, repairs, losses and other taxes paid was created. Payroll deduction of taxes by employers was begun (and later abolished) to ensure collection. After the war, most taxes including this income tax, were repealed. From 1868 to 1913, almost 90 percent of all revenue came from taxes on liquor, beer, wine and tobacco. The Wilson Tariff Act revived the federal income tax in 1894, but it lasted less than one year because it was a direct tax and, since it did not consider the population of each state, the U.S. Supreme Court ruled it unconstitutional.
In 1899, the Spanish-American War was funded by sale of bonds, taxes on recreational facilities used by workers, and doubled taxes on beer and tobacco. Chewing gum was also taxed. After the war, the remaining high tariffs and excise taxes were recognized as unsound economic policy. Proposals to reinstate the income tax were then introduced by congressmen from agricultural and rural areas rather than instituting property taxes, especially on land..
After much debate and disagreement, the 16th Amendment to the Constitution was ratified in 1913, granting Congress the power to levy a tax on personal income even if it was earned by illegal means. Less than one percent of the population paid income tax at the time. Form 1040 was introduced as the standard tax reporting form and with many changes over the years remains in use today. The institution of income tax gave the government the right and the need to know about an individual's economic life. In 1916, Congress required confidentiality of this tax information.
Wars, prohibition, inflation, recessions, all influenced changes in the tax structure to meet the needs of our nation. Even the name of the Bureau of Internal Revenue was changed to the Internal Revenue Service, or as we know it, the IRS. As I prepared for this article, I found that tax history gives insight into much more than just the tax structure and how it came to be. It is a tremendous source of information on U.S. history, commerce and even literature.
Many citizens who previously filed their own taxes no longer feel competent with preparation and desire help. Even Albert Einstein said, "The hardest thing in the world to understand is the income tax."
Tax-Aide is help that is knowledgeable, accurate, and in line with those changeable IRS rules and regulations. It is a program sponsored by the National AARP Foundation and guided by the IRS. Its function is to provide free tax preparation, especially to those citizens who are 60 years or older, people with low income and for others if the preparation meets the scope of AARP Tax-Aide training. The volunteer staff are primarily retired persons from all walks of life. They attend tax school each year to reinforce their ability and keep up with any changes in the tax system. They then must pass the IRS test before being certified as a tax preparer.
Bill Fritschen, State Tax-Aide Coordinator, has over three hundred volunteers in Kansas working at over one hundred tax sites in the state. In District 14, which includes Hays, 23 volunteers will be working from through April 15 this year. It is necessary to have an appointment, which is made by calling (785) 259-2134 from 9 a.m. to 4 p.m. Tuesdays and Thursdays.
Last year, approximately 700 tax returns for the Hays area were completed. Electronic transfer was required with occasional paper returns preferred. Refunds, if sent directly to the client's bank account, were received by the client within about 10 days.
I guess no one can say they enjoy paying taxes, but we all do share in the benefits that come through the tax system. We thank all the volunteers who give of their time and talent to help others!
Ruth Moriority, Hays, is a member of the Generations Advisory Group.