Richard A. Lindsey, CPA

Lindsey & Waldo, LLC – Certified Public Accountants

  • Dec 13

    You always need something to fill the natural voids that occur in the conversation at Christmas and New Year’s parties. Here are a few useless Q & As that could start a long-winded debate or a bored sigh. So use them carefully.

     

    Q1)          How long is the federal tax code?

    A)             73,954 pages. That’s 185 times longer than it was in 1913, when the code was 400 pages.

     

    Q2)          Which amendment to the U.S. Constitution established the government’s right to tax income?

    A)             The 16th amendment. Ratified in 1913, the 16th amendment stated that “[t]he Congress shall have power to lay and collect taxes on income, from whatever source derived…”

     

    Q3) How many changes have been made to the code since 2001?

    A) Approximately 4,680 changes have been made over the past dozen years, or more than one a day on average.

     

    Q4) How many hours do individuals and businesses spend on their taxes every year?

    A) 6.1 Billion hours a year. That’s equivalent to more than three million full time workers’ hours annually, assuming at least two weeks of time off.

     

    Q5) When did the income tax start to hit the middle class in earnest?

    A) World War II. Between 1939 and 1943, the number of Americans paying the income tax in- creased more than six fold to fund WWII and instill shared sacrifice.

     

    Q6) What makes the federal income tax code progressive?

    A) The more you make the more you pay (generally speaking).

     

    Q7) Which is the most expensive tax break?

    A) Health care exclusion. The money your employer contributes to help pay for your health in- surance is treated as tax-free income to you. The break is estimated to cost $760 billion over five years.

     

    Q8) How many tax provisions are set to expire this year?

    A) 55. Congress has made more parts of the tax code “temporary” over the years. The number of annual expiring tax provisions has more than tripled since 1998.

     

    Q9) What percentage of total revenue in 2012 came from the individual income tax?

    A) 44%. In fiscal year 2012, individual income taxes accounted for 44% of all federal revenue. That includes, however, business income from companies whose owners opt to file under the individual code.

     

    Q10) When was the last time Congress embarked on full-blown tax reform?

    A) 1986.  Congress last overhauled the tax code in 1986. But the work began a few years before. So today’s Congress still has a long way to go before it’s ready to approve a major reform.