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About Medford mail tribune. (Medford, Or.) 1909-1989 | View Entire Issue (July 5, 1962)
Bedford mail tribune, medford. oregon THURSDAY. JULY S. 1962 A 13 interna! Revenue (Editor's Note The Inter nal Rerenue Service ob serves lis 100th anniversary Monday. The following dis patch is for thosa who hava tht stamina to raad mora.) By NORMAN RUNION Washington IUPD - Sure as death and taxes, no crowd of well-wishers gathered to sing happy birthday to a prosper ous 100-year-old: The Internal Revenue Service. But like it or not-and most people don't-IHS shows every siRn of entering the second century of its life full of health, vigor and our money. Abraham Lincoln, the Great Emancipator, linked the American people's pocket books to the government on July 1, 1862, when he affixed his signature to a bill creating the office of commissioner of Internal revenue. The first taxman was George S. Boutwell, a former governor of Massachusetts, and in his first year IRS pull ed in $36.6 million to help Lincoln fight the Civil War. (94 Billion Boutwell's 1960 counter part is Mortimer J. Caplin. And last year his agents and forms collected $94.4 billion, much of it to help pay the cost of the cold war. This is proof, if any is needed, of the truth in a statement by Thomas Paine: "War involves in its prog ress such a train of unforseen and unsupposed circumstances that no human wisdom can calculate its end. It has but one thing certain, and that is to increase taxes." Villified, the butt of count less jokes, yet indispensible to the functioning of society, Internal Revenue faces its second hundred years wiih customary aplomb. To com memorate the occasion, it is adopting a special symbol, a "centennial emblem." According to the IRS, "it shows the 'Eagle,' traditional national emblem of strength, courage, vigilence and author ity .. . the 'Man,' represent ing the millions of citizen-taxpayers who voluntarily assess their tax under the American system and, at the same time, the public servants compris ing the revenue service . . . 'Industry,' illustrating produc tive wealth, source of the na tion's revenue . . . and the Map,' signifying the nation and Internal Revenue's mis sion of fair and impartial ad ministration." 'Drop Dead' To all this some of the American public probably feels like adding a slogan of its own: drop dead. Such a thought probably was in the mind of one man who filled out the "occupation" question on his tax form with the an swer: "Taxpayer." Or another who wrote: "I don't know who will be our first man on the moon, but I do know who will be the sec ond. He will be an IRS income tax collector." And there was the person who's opening yell at a IRS telephone operator was: ''What makes you people think I can't add?" With its vast operations to day, internal revenue is a far rry from the makeshift organ ization that sprung into exist ence on July 2, 1862. Sixteen days after Lincoln signed the law. Commissioner Boutwell came to Washington, finding in it every sign of a nation at war. Long lines ot troops and horses plodded down the streets. In the White House, long Abe Lincoln saw them from his windows and brooded on the appalling cost -in men and money-of the fateful struggle between North and South. By the spring of 1862 the eost of the fighting was run ning nearly $2 million a day. Taking note of this, and being prodded by Lincoln. Congress passed the most far-reaching money-producing measure en acted in the United states up to that time. System Basil The act, which is the basis of the present internal reven ue system, taxed incomes, es tates, public utilities, banks. insurance compani adver- timements, occupations, liq unrs, and tobaccos. Under the law. there was 3 per cent tax on salaries and other income over $600 and under $10,000. and a 5 per cent tax on income over MO. 000. For the first time In U S. history, there as also a provision for withholding taxes. All government pay r;ters were required to take - it !- pro- tax from sal aries of everyone in the mil itary, naval, and civil serv ices of the United States, in cluding congressmen. The withholding provision also applied to tax on inter est and dividends paid by all railroads, banks, trust com panies and fire, marine life, inland, stock and mutual in surance companies. To administer this, con gress set up the office of com missioner of internal revenue. Lincoln, searching around for someone to take over, settled on the 44-year-old Boutwell, who had taught school, served in the Massachusetts legisla ture, and been the state's gov ernor. Reads Law When Boutwell arrived in Washington he had only a bare idea of what he was sup posed to do. "My first labor," he later said, "was to read the law, which I had not be fore seen." In doing so he found he had the power to assess, levy and collect internal taxes, along with the right to enforce the tax laws through seizure and prosecution. This "as fine with Boutwell, but he lack ed the equipment to do it. He opened an office on the first floor of the treasury building and found one clerk to help him out. Six months later his tax men totalled 3,882, most of them appointed by himself because Lincoln was too busy. The president, in fact, named only two collectors whom he knew personally. Before Boutwell had been in office five months he had made more than 100 decisions Anniversary relating to general principles of the w law. Ke later said that "the pub lic anxiety in regard to the construction of the law in duced a large amount of cor respondence with persona in various parts of the country." Such correspondence, nat urally, is still coming in. One puzzled woman inquired not long ago: "Since 1932 I've saved nearly three shopping bags of empiy medicine bot tles to substantiate my med ical expenses. My husband says I'm crazy. Do you think I'm crazy?" I In Field I During Boutwell's reign, much of the work was done in the field, whereas a great er proportion now takes place in Washington. Assess ors, paid from S3 to $5 a day, collected the taxes and ran the system. As usual, they did a good job: by 186C. re ceipts from internal revenue reached a new high of $311 million. At first. It was considered patriotic to pay the ta ep. But as the war dragged on, and finally came to a halt, resent ment grew and early in the 1870 s the whole tax system was dropped. It lay dormant until 18114, when a new law was passed by congress. This lasted only one year before the supreme court declared it unconstitu tional on the grounds that di rect taxation was forbidden. With the needs of a growing society calling for more pub lic money, congress acted to rectify the situation. In 190!) legislation was set in motion to amend the con stitution to give congress 111.' power to raise ta: es. That year Alabama became the first state to approve the amendment, the 16th to the Constitution. It was finally ratified by the necessary 36 states in 1913. Wyoming had the honors. $7,000 People Today the Internal reven ue service consists of 57,000 people who use highly effi cient electronic computers to make sure that Boutwell's credo is carried out: "The stability of the system is in the equal imposition of tax es and in the Just and im partial administration of th. law." But all of these modern methods, and the new ones to come, will never erase that complaint as old as the times, the taxpayer's gripe. Such as the gentleman who was told he could take a $600 deduction for his child, and replied: "What? Only $600! Listen. I'll bring him in and leave him with you. Let's see you take care of him for just $600 a year." ? 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