What are federal tax groups?
All modern industrial nations tax the income of their citizens. Most of them differ in their tax rates according to the above amount. In the United States, these changes are codified, applied by the Internal Revenue Service (IRS) and are commonly referred to as federal tax groups. Before 1895, the United States Congress took out income taxes with federal tax belts somewhat similar to modern practice. The constitutionality of the law was questioned in the case called Pollock v. Farmers' Loan Trust. In 1895, the US Supreme Court ruled that the Constitution prohibited this special approach to taxation and all tax groups were removed from the assessment. In 1913, the sixteenth amendment to the Constitution was ratified by states in 1913, allowing a modern taxation approach, including the use of federal tax groups.
The highest US federal tax group differed from 7% of the tax rate that was in 1913 in 1913Over $ 500,000 (USD), 92% of income exceeding $ 400,000 in the era after World War II. Until 2011, the highest federal tax group was reduced to a 35% rate that applies to income exceeding $ 379,150. According to the US Office for Labor Statistics, $ 500,000 had the same purchasing power in 1913 as more than $ 10,700,000 in USD in 2009.
US tax rates are not comparable over time due to many factors, even in connection with tax deductions. In the first years of US tax law, very few tax deductions were allowed, although the deduction of personal exemption was set for an amount that could support the household throughout the year. The practice of employing high federal tax groups set up to cover the cost of creating in World War II created a new industry: lobbying for tax advantages for different corporate interests. These tax advantages, which have become so -called tax hids, allowed quite possible, although in ROCE 1988, earn more than $ 1 million per year, but pays almost no income tax. Many tax shelters of this era are no longer in the US Tax Act, the situation is cordially approved by most economists who believe that tax shelters lead to incorrectly allocation of resources.