It’s April 15th and today I will not write a single thing about last minute tax moves (you’re too late) or about the tax stimulus (just fill out a tax return and put in your direct deposit information) or anything boring like that. You don’t want to be like that guy to the right, right? Nope! Today will be a day of fun and we can start it off with fifty fun facts!
Some of these facts, I can guarantee, will not be fun. There will be a mix of tax history, some current tax laws, some mind boggling statistics that will likely piss you off; but at least we’ll start you off with some of the weirdest tax laws and funny trivia! You’ll read some of them and say, “Hmm… okay, kind of interesting, but not actually fun.” However, some of them will be fun or your money back! Let’s get started.
Weird Tax Laws
- Drug Tax Stamps – In at least 23 states there is a tax on illegal drugs. When you buy an illegal drug, like marijuana or even moonshine, in Tennessee, you have 48 hours to report it to the Department of Revenue to pay your tax and get a stamp for the substance. No identification is needed, though there are a dozen cop cars sitting outside the office. (Just kidding about the cop cars, I have no idea)
- North Carolina has had a illegal drug tax stamp law in place for 15 years, only 79 people have purchased stamps since 1990 (most of those were stamp collectors, or complete and utter morons).
- If the law sounds absurd, it’s only because of the way it was worded. The real end result is that people are taxed on drugs found in their possession when they’re busted. This creates a new revenue stream for the state or county and I can’t say I can argue with that.
- “Jock tax” – Levied on athletes who earn an income competing in a particular city or state. California first levied this tax on athletes from Chicago in 1991 after the Chicago Bulls beat the LA Lakers in the 1991 NBA Finals . What a bunch of sore losers.
- Alabama has a 10 cent tax on a deck of playing cards.
- Blueberries from Maine are subject to specific tax too, anyone who grows, purchases, sells, handles, or processes blueberries in Maine has to pay a penny and a half tax per pound.
- “Fountain soda drinks” in Chicago are taxed at 9%, if it comes in a bottle or can then it’s only taxed at 3%.
- Peter the Great in Russia once taxed beards (he doesn’t do much taxing anymore). There was also a tax on souls, hats, boots, beehives, basements, chimneys, food, clothing, birth, marriage, and burial.
- In the UK, everyone under the age of 75 pays a TV license fee £126.50 for color TVs and £42.00 for black and white TVs (it in part pays for state run networks like the BBC). If you are legally blind, you only owe half that fee.
- According to the UK’s Tax Avoidance Schemes Regulations 2006, “it is illegal not to tell the taxman anything you don’t want him to know, though you don’t have to tell him anything you don’t mind him knowing.” What!?
- Royal Navy ships that enter the Port of London must pay a barrel of rum in tax to the Constable of the Tower of London. All visitors to my house must pay a case of beer in tax to me.
Tax History & Facts
- The first income tax ever was in 1404 in England.
- The first property tax in the United States was in 1798 and it was on land, houses, and slaves.
- The first US income tax started during in the Civil War to help raise money back in 1862.
- The first federal tax office in the US was the Office of the Commissioner of Internal Revenue in 1862, what a coincidence!
- The 16th Amendment, ratified in 1913, established the first permanent US income tax.
- Four states rejected the amendment: Connecticut, Florida, Rhode Island, and Utah.
- Two never considered/discussed it: Pennsylvania, Virginia
- Everyone pays income tax. [this fact is decidedly not fun, I concede this]
- There are over 7 million words in the tax law and regulations. That beats the Gettysburg address, the Declaration of Independence, and the Holy Bible all rolled into one (269+1,337+773k).
- There were 402 tax forms in 1990, by 2002 that number had jumped to a staggering 526.
- My personal favorite is Form 6478 – Credit for Alcohol Used as Fuel. (I don’t think the IRS really counts beer as fuel, though it does keep me going sometimes)
- According to CCH, the number of pages in the tax code and regulations went from 26,300 in 1984 to an astonishing 54,846 in 2003. Those 1.2M tax preparers are smiling every year.
- The IRS sends out over 8 billion pages in forms and instructions every single year, that’s nearly 300,000 trees (now they use recycled paper).
- The easiest form, the 1040EZ, has thirty-three pages of instructions.
- Tax Freedom Day was April 23rd in 2008, a few days earlier than last year because of the tax stimulus rebate.
Tax Collection & Forms
- You know how everyone hates the taxman? Did you know that in 1789, the start of the French Revolution, tax collectors were sent to the guillotine? Poor folks were just doing their jobs… it’s not like they enjoyed it!
- Too bad those French tax collectors didn’t live in Greece a few thousand years earlier, back then the tax professionals were considered the most noble man in society (perhaps that’s why they were given the slice in France, the French Revolution wasn’t particularly friendly to “nobles”)
- 21% of paper returns have errors, 0.5% of e-file returns have errors; do your taxes electronically.
- In 2003, 78% of returns received refunds to the tune of $205B and an average of $2,073 per return.
- The first e-file (electronic transmission of a tax return) occurred on January 24, 1986…
- By 1989, taxpayers in 36 states could e-file their taxes…
- By 1990, everyone could.
- For each $100 that the IRS collects, it costs only thirty-nine cents. While you might hate them, tell me what other agency runs with such efficiency? The answer is probably none.
- The Cato Institute estimates that there are approximately 1.2M tax preparers in the country.
- AMT was designed to snag 155 wealthy taxpayers in 1969. (Yeah, they created a whole new tax to get 155 people!)
- Technically, income tax is voluntary (but not optional)!
- There are 114k employees at the IRS, that’s more than the CIA or the FBI.
- According to the Joint Committee on Taxation, in 2006, 53.7% of all federal income taxes were paid by those earning $200k+. Those between $100k and $200k paid out 28.3% of income taxes. That means 82% of taxes paid are by those making more than $100k. (link )
- Taken in aggregate, those earning less than $40k paid 0%.
Facts That Will Piss You Off
- A Government Accountability Office report released in 2004  showed that…
- 61% of US corporations paid no income tax between 1996 and 2000.
- 94% of US corporations paid less than 5% their total income in taxes.
- US corporations paid, on average, $11.88 in taxes for every $1,000 in gross receipts.
- 38% of big companies ($250M+ assets or $50M+ revenue) paid no taxes.
- in 1943, 39.8% of taxes collected came from corporations; only 7.4% in 2003.
- From 1996 to 1998, these companies paid zero taxes: AT&T, Bristol-Myers, Squibb, Chase Manhattan, Enron, ExxonMobil, General Electric, Microsoft, Pfizer and Phillip Morris. (link )
- In 1998, these companies received a total of $1.3B in rebates (despite making $12B in pre-tax profits): Texaco, Chevron, CSX, PepsiCo, Pfizer, J.P. Morgan, Goodyear, Enron, General Motors, Phillips Petroleum and Northrop Grumman. (link )
Now that you’re all fired up… I will leave with one final quote, most often mis-quoted (except right now, duh!). Benjamin Franklin, on November 13, 1789, wrote the following to Jean-Baptiste Leroy: “Our new Constitution is now established, and has an appearance that promises permanency; but in this world nothing can be said to be certain, except death and taxes.”