Richard Arthur Kelo– Taxes

As a tax expert, Rick Kelo is highly knowledgeable about the history of taxation, particularly in the United States (which was the primary cause of the American Revolution of the late 18^th century).

Various unpopular tax acts were enacted by the British during the Colonial era. These included the Stamp Act, which required all legal documents, wills, permits, and even playing cards in the colonies to carry a tax stamp. This act was enacted November 1, 1765. Britain eventually repealed this act due to widespread protest and boycotts. In 1767, Charles Townshend, Chancellor of the Exchequer, proposed to enact two tax laws. Parliament passed both of them, and they resulted in taxes on tea, glass, paper, and paint. The 1764 Sugar Act taxed sugar, coffee, and cloth. And the Tea Act of 1773 taxed none other than tea itself.

The Tea Act, of course, led to the famous Boston Tea Party of 1773. It was reprisals for this action – in which many men dumped several tons of tea into Boston Harbor – that led to the outbreak of the Revolutionary War in 1775.

The United States, of course, still taxes its subjects, but American citizens are represented by their congressmen and senators in the government – with the exception of residents of Washington, D.C.; they have no government representation, and their license plates read: “Taxation without Representation” (a rallying cry of the American Revolution, from colonial subjects weary of paying taxes to a government in which they had no voice).

In 1861, war broke out between the North and the South. Congress, needing funds to pay for the war effort, imposed personal income tax, the first ever in the United States. This income tax, part of the Revenue act of 1861, was rescinded in 1872. In 1894, the Tariff Act also enacted a new income tax statute.

In 1913, Congress ratified the 16^th Amendment to the United States Constitution. This amendment allows Congress to collect tax on all income, regardless of source. Net personal income above $3,000 was taxed 1%. Income above $500,000 was subject to a 6% surtax. Income over $1,000,000 was subject to a 77% tax rate by 1918. During the Great Depression, all income above $200,000 was taxed at a staggering 94%.

In 1916, Congress passed the federal estate tax which is still in use today. It taxes the wealth of a donor's estate upon the transfer of this estate to the inheritor.