Tax and Accounting

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Running head: Tax law and Accounting

Tax Law and Accounting Paper

Theresa Hinton

February 07, 2010

University of Phoenix

Edward Adelman

Introduction

The history of taxation in the United States began when it was just colonies ruled by the British Empire, French Empire, and Spanish Empire. When the United State gained their independence from Europe they collected poll taxes, tariffs, and excise taxes. The United States forced income taxes now and then until 1895 when unallocated taxes on interest, dividends and rents were ruled unconstitutional. The establishment of the 16th amendment to the United States constitution modified the distribution requirement in 1913, and since then the income tax has become one means of funding for the Federal Government.

Define the objectives of modern income tax statutes

Tax forced by public authority on the incomes of persons or corporations within its control. In nations with an advanced system of private enterprise, income taxes represent the leading source of government revenue. Income tax put on individuals or family units is known as personal income tax. In 1799 Britain endorsed a general income tax to finance the Napoleonic Wars. In the U.S. an income tax was first tried during the Civil War; the Supreme Court held it to be constitutional in 1881 but declared another income tax unconstitutional in 1894. In 1913 the 16th Amendment to the Constitution made the personal income tax permanent. The fairness of personal income taxation is based on the principle that one's income is the best single index of one's ability to contribute to the support of the government; most personal income taxes are considered on the theory that when people's financial situation differ, their tax liabilities should also differ. The U.S. income taxes are progressive taxes, falling more heavily on those who earn more money, and individual income tax deductions are allowed for items such as interest paid on home...