On November 3, 1913, the first American citizens received information about the new national income tax.
The 1913 form exempted all income below $3,000 a year for single folks, and $4,000 if they were married. We call these standard exemptions.
Doing a calculation of the value of $4000 in 1913 compared to 2021 (108 years later), we get an income figure of $78,300.00. Folks making under that comparative amount paid ZERO in income taxes. However, that really doesn’t tell the whole story. If calculated in other ways, the figure is higher.
$4000 in 1913 has a relative inflated worth of $114,295.83 as of today. This can also be compared in other ways. Today $4000 from 1913 has a relative income worth of $534,266.15, $826,598.98 or $687,946.86. But $4000 from 1913 has a relative project worth of $2,345,673.61! The above numbers are from calculations made at MeasuringWorth.com.
So… Just based on the above numbers, it looks to me like the Federal government went after “the rich” in 1913 – not the common folk. This sounds eerily familiar to what is taking place in congress at this very moment. Interesting.
The framework was in place to do an income tax in 1913, as the Bureau of Internal Revenue was established July 1, 1862, to collect this type of tax, which was used to pay for the Civil War. It lasted until 1872 when it was repealed with the support of President Grant. We now call this Federal agency the Internal Revenue Service (IRS), and sweat it out every April 15.
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