Thank Goodness It's Monday #397

 

CELEBRATING 100 YEARS OF INCOME TAX

Yup, you read that right: Celebrating! 

The Federal Income Tax as we know it has its 100^th birthday this month. The origin of the modern day income tax on individuals is generally cited as the passage of the 16th Amendment, passed by Congress on July 2, 1909, and ratified in February of 1913.

The New Man on the Job

Artist:John Scott Clubb

Date: 1913

With precious few fans of the tax (especially in our nation’s capital) there are not likely to be many candle-covered cakes and parties.

 

But I’ll be celebrating -- for a slightly curious reason.

And maybe you can, too. The Income Tax Centennial provides me with a timely “hook” for sharing (once again for anyone who knows me even moderately well) one of my favorite Life Lessons.

In fact, I’ve told and retold, repurposed, e-blasted, blogged and whatever the core story I’ll be sharing today many, many times before. So I apologize in advance if you find it old news dressed in a new outfit for this Centennial Party. 

• But even if I’ve accosted you with it before, please read on. I hope you find “tickler” value in its repetition and maybe new insight for dealing with all manner of challenges in today’s economic conditions. Thanks for your patience in reviewing it again.
• If it turns out to be a new item for you, I hope you can take it to heart and use it to make these “taxing” times easier to weather.

Here’s the 100^th Birthday version, starting with -- 

Some basic info: As you may have noted by now, I like acronyms, TGIM... FYI… BYE... DREAMS… JDS. 

Certainly they serve as convenient "shorthand." But they are also a powerful and valuable tool for reinforcing important concepts and bringing the full force of the underlying principles quickly to mind.

So, although it’s a centennial birthday for the dread acronym IRS, that leads my thinking to the origins of perhaps the most important acronym in my mind – 

EHFTB

EHFTB stands for –

Everything Happens For The Best

Here's the tax time story behind it: Richard Prentice Ettinger, the co-founder of the publishing giant Prentice-Hall, discovered EHFTB as he started in business as a publisher. 

In the earliest days of the company, the pages for his second book, about the new-in-1913 Federal Income Tax Law, had just come off the press. 

However: Congress, then as now, couldn’t settle and fiddled about with ongoing last-minute changes in the law. 

This made many of the already-printed pages inaccurate. Stuck with a huge printing bill and pages of worthlessly incorrect information, it appeared the new publishing enterprise was doomed.

But RPE, as he was known (more initials), thought hard about what he HAD.

He realized many of the pages were NOT adversely affected.

Snatching victory from the jaws of defeat. He concluded that he could salvage the unaffected pages … print some new, correct pages ... punch holes in the whole batch ... and put them all together in a loose-leaf binder.

Bonus payoff: He could sell not just one book but also sell replacement pages on a continuing basis as the Tax Law continued to evolve.

That was in 1913. The forward-thinking author of Brave New World, Aldous Huxley, noted at the time that Ettinger had done with the loose-leaf page something equivalent to what Guttenberg had done with moveable type. 

Such subscription publishing became a cornerstone of a highly successful enterprise; proof indeed that EHFTB -- Everything Happens For The Best.

 “A nice, but slightly Pollyanna-ish, sentiment,” you say?

Wait! There's more. 

In fact, the “more” is, perhaps, the most important part. 

Richard Neill, RPE’s protégé who was entrusted with the ongoing publication of that first tax tome, passed along this history lesson for many years. 

(I was a Dick Neill protégé and was fortunate enough to have also known RPE. And yes, he was referred to as RN and I was GS.) 

But in the telling and reminding, RN added the crucial element that makes the difference between an interesting bit of business history and –

-- a principle which any of us

can take to heart and apply

TGIM ACTION IDEA: When appropriate, and especially if some problem needed confronting or remedying, Richard Neill would annotate the margin of a memo or report with a handwritten reminder -- EHFTB. 

And under those initials he would write –

FTWMIH

The importance of this second thought, and the principle behind the phrase these letters represent, is THE KEY to making EHFTB work.

Richard Neill's FTWMIH reminder is that –

Everything Happens For The Best

For Those Who Make It Happen

TGIM IDEA IN ACTION: You must take action for anything to turn out “for the best.” You must be ever alert for opportunities to triumph in the face of adversity. 

And it’s not easy. You can’t be a passive bystander. You must be constantly and consistently preparing for the future. And when challenges arise you must rally that preparation and confront them. 

It isn’t enough to want the best. Continually challenge yourself to know what you’re going to do to get to where you want to be. Effort makes achievement. 

Make the effort. Make it happen – for the best.

Then celebrate along with me. 

Geoff Steck
Chief Catalyst
Alexander Publishing & Marketing

8 Depot Square

Englewood, NJ 07631
201-569-5373
tgimguy@gmail.com

P.S. Return with us now to those taxing times of yesteryear: Here’s a thumbnail earliest-days-of-the-Federal-Income-Tax time line.

1909 - President Taft recommended Congress propose a constitutional amendment that would give the government the power to tax incomes without apportioning the burden among the states in line with population. Congress also levied a 1 percent tax on net corporate incomes of more than $5,000.

The first Form 1040 -- 1913

 

1913 - As the threat of what would be known as the First World War loomed, Wyoming became the 36th and last state needed to ratify the 16th Amendment. The Amendment stated, "Congress shall have the power to lay and collect taxes on incomes, from whatever source derived, without apportionment among the several states, and without regard to any census or enumeration." Later, Congress adopted a 1 percent tax on net personal income of more than $3,000 with a surtax of 6 percent on incomes of more than $500,000. It also repealed the 1909 corporate income tax. The first Form 1040 was introduced.

1918 - The Revenue Act of 1918 raised even greater sums for the World War I effort. It codified all existing tax laws and imposed a progressive income-tax rate structure of up to 77 percent. (For 2013 the top marginal rate is 39.6%.)

 

"Taxes are what we pay for civilized society.'' — U.S. Supreme Court Justice Oliver Wendell Holmes, Jr. (1841-1935) said that.