“In this world nothing can be said to be certain except death and taxes.” ~ Benjamin Franklin
It is tax season once again. According to Forbes, the top 20% of income earners pay a 28% tax rate while the lowest 20% pay a 2% tax rate. For the 60% in the middle, the average tax rate is 15%.
Historically, those in power have taxed a variety of necessities. One of the consistencies throughout time is that taxes change the behaviors of those being taxed.
Russian Czar Peter the Great knew this and decided to tax beards in order to change grooming practices. He required beard wearers to carry a coin proving that the bearded had paid the tax. On the coin was inscribed, ‘the beard is a superfluous burden’…sort of like the tax itself. I wonder if Peter saw the irony.
In ancient Egypt, the Pharaoh taxed all cooking oil and demanded that it not be reused. He was also the only person one could buy cooking oil from. Does that remind you of any modern day taxes?
Among the quirkier taxes in history was one by Roman Emperor Vasparian. He taxed urine. Urine merchants would collect the valuable liquid from people because of its ammonia content which was used in tanning leathers and washing clothes. Fresh scent had a whole different meaning back then.
During the Middle Ages in Europe, many governments had a special tax on soap.
Looking at modern day tax laws, Spain recently raised its tax on movie going to 21%. As a result, theatre operators in protest began selling carrots which are taxed at a 4% rate. The theatre ticket is now free with the purchase of a carrot. Couldn’t they have chosen a quieter vegetable?
In Germany, a bribe is tax deductible. The only proviso is that you must disclose the name of the bribe recipient.
Here at home, California taxes fruit sold in vending machines at a 33% rate. Take that self- service fruit lovers!
Iowa, New Jersey and Pennsylvania do not tax pumpkins unless they are for carving at Halloween. How they determine the difference is anyone’s guess.
When it comes to laws and taxation, Illinois has the most complicated system of any state. For example, candy that includes flour is taxed at a 1% rate while non-floured candy has a 6% rate. Soda sold in a bottle or can gets a 3% tax while soda sold from fountains gets a 9% tax.
Texas taxes belt buckles but exempts belts.
Maryland just doubled its annual ‘flush tax’ to $60. This is a tax for flushing your toilet. During 2012, they also began taxing wine you bring to a restaurant. As you pay a tax when you buy the wine, this is a blatant example of double taxation.
Alaska now exempts those over 65 years of age from taxes on the purchase of goods, services and rentals. New Mexico has determined that people over 100 years of age are not subject to tax so long as they are not claimed as a dependent by a family member. In Connecticut, adult diapers tax-free while Oregon gives a $50 tax credit to double amputees.
In closing, the federal tax code has nearly 4 million words. This type of complexity invites tax scams. If anyone offers you or someone you know ‘free’ money involving the IRS or Social Security, assume it is a scam. Additionally, many people impersonate charitable organizations. Never give money if you cannot independently verify a charity’s legitimacy. You can go to http://www.irs.gov/Charities-&-Non-Profits/Exempt-Organizations-Select-Check to confirm the identity of any charity.
