Column By Mike Bibb
“During that year (1913), there was a 1% additional tax on the taxable income over $20,000.00 and not exceeding $50,000.00; 2% additional tax on the taxable income over $50,000.00 and not exceeding $75,000.00; 3% additional tax on the taxable income over $75,000.00 and not exceeding $100,000.00; 4% additional tax on the taxable income over $100,000.00 and not exceeding $250,000.00; 5% additional tax on the taxable income over $250,000.00 and not exceeding $500,000.00; and 6% additional tax on the taxable income over $500,000.00.
To put these numbers into perspective, the U S BLS indicated that $50,000.00 in March of 1913 would equate to $1,627,969.39 in February of 2025; $500,000.00 in March of 1913 would equate to $16,279,693.88 in February of 2025.”
The Chronicles of Grant County, Richard McDonough, April 15, 2025.
Now that the frustration and confusion of this year’s April 15 Tax Day has passed, most people can semi-relax, content they’ve struggled through another spring ritual of recording wage statements, expenses, deductions and a myriad of other taxable requirements in determining additional payments owed or refunds the overlords at the IRS may grant them.
Mr. Richard McDonough’s article “Tax Day April 15, 2025,” succinctly illustrated the primary point of my similar income tax column in The Gila Herald, April 2, 2025 (see Editorials section)—the income tax amendment was conceived and designed to be applied to wealthy individuals, companies, and corporations that actually received a taxable income from stock purchases, manufacture, sales, and services of their products.
The 16th Amendment to the U.S. Constitution was never intended to be imposed upon people who worked for a wage or salary; as such, remuneration was merely payment for their time and labor and was not constitutionally taxable unless applied equally. — Article 1, Sec 9, Par. 4.
McDonough remarked that even a single person had to earn over $3000.00 in 1913 before paying a 1% income tax. According to the Bureau of Labor Statistics, that would be about $97,678.00 in today’s dollars.
A married couple needed $4000.00 in 1913 before paying an income tax — $130,237.00 in 2025.
These requirements must have applied to a select group of people and organizations. An ordinary wage earner and family wouldn’t have received this kind of income in 1913.
McDonough’s figures clearly explain that the majority of folks were not in the $50,000 – $500,000 income range (1913 dollars), which, as he shows, would equate to $1,627,969 – $16,279,693 today.
However, some businesses must have been.
For instance, steel companies, railroads, oil corporations, big construction firms, emerging auto manufacturers, and other industries were probably making these amounts of money. Consequently, a 3%, 4,% and 5% income tax on the profits of these organizations would generate large amounts of revenue for government tax collectors.
Many times more than the average wage of a normal worker.
Today, that concept hasn’t changed. CEOs, company presidents, board members, stockholders, and Wall Street investment firms have millions and billions of dollars invested in Fortune 500 companies.
An assembly line technician, mechanic, and waitress only have their time, skills, and bi-weekly paycheck.
Also, most employees don’t have additional investments in the companies they work for or receive money beyond their agreed compensation.
It’s not nearly the same. But there are a whole lot more of them, and like grains of sand, their small taxes can add up to mounds of money for the government.
Only sooner. Income taxes and other taxes are automatically withheld from an individual’s paycheck before he ever receives it. The IRS is paid first, and then the worker gets what’s left.
That’s the trick. While the IRS and federal courts constantly enforce changing tax regulations, corporations can pass their tax obligations to the consumer through higher costs for their products. At the same time, the neighborhood handyman has to keep detailed records of charges and expenses to satisfy IRS rules.
This hodgepodge of mind-numbing regulatory mandates has evolved over the past hundred years into a yearly time-consuming task of churning out calculations, deductions, and verifiable receipts—particularly for the guy/gal who’s just trying to keep cereal on the breakfast table, pay the mortgage, and pay their local, state, and federal taxes at the same time.
They don’t have the convenience of employing expensive tax lawyers, certified accountants, and Washington lobbyists to help smooth the process of their annual “Render unto Caesar” obligation. Caesar and his minions determine their allowable deductions.
Yet, the lawful applicability of the Tax Code and 1040 Forms is rarely mentioned. It’s naturally assumed the income tax applies to everyone and everything when, upon closer examination, that’s probably not the case.
Unless a truck driver, school teacher, restaurant cook, newspaper reporter, police officer, hardware salesman, store clerk, and hundreds of other occupations regularly receive over $1 million yearly.
Otherwise, maybe Elon Musk and President Trump’s Department of Government Efficiency (DOGE) will begin investigating the lawfulness of the Internal Revenue Service’s business practices.
If so, they may eventually conclude that something’s out of whack in the way the IRS has been operating or that the practice of federal district courts interpreting and enforcing certain income tax regulations has been kosher.
Income is not individual wages any more than a NASCAR stock car is comparable to a Pinewood Derby racer. Just because income and wages involve money and a NASCAR and Pinewood Derby racer have four wheels, does not make them the same.
Hopefully, someone will figure out this scam and return the IRS’s taxing duties to their original intended purpose—a government collection agency to gather income taxes from businesses and individuals who have received taxable income, as established in 1913 by the 16th Amendment.
The opinions expressed in this editorial are those of the author.
