Chapter 50: The IRS That Can't Be Messed With

There is nothing certain in this world except death and taxes. Pen, fun, pavilion www. biquge。 info -- Ben Franklin

When Congress approved President Roosevelt's request for increased defense spending in early July, there was jubilation in the Army staff. According to this expansion plan, the size of the US Army will more than double in five years. For the vast majority of lower- and middle-ranking officers, this means that they will have at least twice as many promotions.

But at this time, John was not happy at all. Because, while Congress agreed to increase such a large ($4 billion) defense spending, it also passed Secretary of the Treasury Morgenthau's plan to increase special taxes on military enterprises.

That is to say, every military enterprise that has received a military contract will pay an additional high tax on top of paying corporate income tax. It means that the government has taken back some of the money they earned.

Although there is still some earning, but it is so much less than it, and no one will be happy. In recent times, Morgenthau, a German Jew, is definitely the most hated person by American arms dealers.

Complaining is complaining, and the tax that should be paid still has to be paid. Even Roosevelt himself, before the April 15 deadline for federal tax filings, had to obediently call his tax advisor to the White House and fill out the tax form carefully, not to mention John.

In the United States, powerful people may be able to ignore the police, prosecutors, and the FBI, but no one dares to ignore the IRS (Federal Inland Revenue Service). I really don't know what the Founding Fathers who rose up to fight for independence in order to pay less taxes (the trigger for the American Revolution was to protest the British tea tax) would have thought when they saw the complicated tax system in the United States today.

At the beginning of the United States, there were very few items that the federal government could tax, only tariffs and some consumption taxes. Article 1 of the Constitution also stipulates that the federal government cannot directly tax residents, but can only distribute taxes to the states, which redistribute the tax amount. The system is designed to limit federal taxing power and prevent the federal government from becoming bigger.

As a result, in 1862, Lincoln, who "must not die well", broke the rules. To finance the Civil War, he created the Federal Inland Revenue Service and began collecting income taxes directly from citizens. At that time, the threshold was set at $600 per year for family income, 3% for $600 to $10,000, 5% for those above $10,000, and a maximum of 10%.

Because the annual household income of Americans at that time was generally less than $600, and only 1.3% of people needed to pay individual income tax, there were not many opponents. And it was during the war that the wealthy families of the North, like Vanderbilt, pinched their noses and recognized it. After all, this tax is nothing compared to the benefits of taking out the damned Southerners.

In addition, it is also common in European history that the government levies a personal tax on the public in order to raise military expenses in times of war (personal income tax is also known as the "war tax"). As soon as the battle is over, it will be abolished, and it will be over after a long period of patience.

But the problem is that after the war, Lincoln refused to cancel the personal tax, which was repaid. When we were fighting, we smashed the pot and sold iron to support you, and after the battle, you still want to lie on us and suck blood, you really don't treat the god of the horse king as three eyes.

John had always felt that Lincoln's subsequent assassination had something to do with his falling out with the northern capitalist class over taxes. Not that these people would be involved, but it is certain that a laissez-faire approach to the retaliation of Southern sympathizers would no longer provide support and protection to Lincoln as they did during the war.

After Lincoln's death, the capitalists fought with the government for many years over the question of whether the personal income tax should be abolished. It was not until 1872 that William Astor of the Astor family succeeded in bringing down the federal government, and the Supreme Court ruled that the federal personal income tax was unconstitutional, and the collection of personal income tax, which had been in place for ten years, was stopped.

This battle completely established the status of the Astor family as the "No. 1 family on the East Coast", and all the rich Americans had to accept this favor. Even later, the head of their family sank into the Atlantic Ocean with the Titanic, and his descendants have always enjoyed the shadow of their ancestors.

So far, no family has torn its face and openly embarrassed the Astor family. On the contrary, whenever the Astor family organizes various charity events, they actively respond to the call and donate generously.

However, William Astor was not able to get it all right. Although the personal income tax was abolished (during World War I, the United States began to resume the collection of personal income tax. But this time it has little to do with a big family like Vanderbilt. It is mainly ordinary high-income people who are taxed, and the real rich have long since learned how to use trust companies and foundations to avoid taxes. But the evil Federal Tax Service has since retained.

Don't look at the name of the Federal Tax Service is Service (the full name of IRS is Internal-Revenue-Service, and the government management department is generally office), but it has more power than the average government agency.

When John first came to the United States in his previous life, more than one of his compatriots warned him not to forget to file his taxes with the federal tax department by April 15 of each year. If it's overdue, there's more to it than just a fine.

For those who come to the armed forces, the tax police equipment of the IRS is no worse than that of the FBI, and armored vehicles and helicopters are readily available. Al Capondo, the "underground mayor" of Chicago back then, not to mention the Chicago police, even the FBI had no problem with him. As a result, as soon as the IRS came out, the gangster was pressed to prison in a few minutes for tax evasion.

The IRS is not afraid of anyone, they have their own federal tax court (there is no jury, and there is no place to fight for sympathy), and they have the power to interpret the tax law. In the United States, where there are so many tax laws, it is almost impossible to compete with the IRS on your understanding of the relevant laws.

Of course, you can also choose to go to the Federal Appeals Court, which specializes in hearing civil complaints. But I'm sorry, but before the court can take up a tax case, you have to pay the taxes that the IRS determines you owe, and then you can sue them for "unreasonable tax refunds."

In this life, John, as a rich man, is only different from his previous life in that the tax filing deadline can be postponed to October 15. (Because most of the assets of the wealthy need to wait for the completion of the tax return of trusts, foundations, and partnerships, they can apply for a four-month extension.) )

What John can do now is to ask the company's tax advisor to study whether there are any legal ways to avoid taxes. Historically, Fleet, who he threw out of the United Aircraft Corporation, because he offended the government, did not design tax shelters in advance (by the time he remembers, all the usual channels were blocked by the IRS), and as a result, 74% of the annual income was paid federal taxes. John didn't want to end up in the same fate as that unlucky guy.

While waiting for feedback from his tax advisor, John was depressed about something else. Why did Hughes set up his company in Los Angeles in the first place, didn't you know that California's state taxes are very high? After paying federal taxes, you have to be stripped of another layer of skin by the state government, and you Hughes don't treat money as money!