I’m a sucker for financial calculators -- you know, those little widgets that help you find out how much you’ll pay monthly on your 30-year mortgage, how long it’ll take to pay off your student loans, or what you can save when you switch your balances to a new credit card.So it was with some interest that I came across a little application last week, courtesy of journalist Kay Bell’s “Don’t Mess with Taxes” blog (http://dontmesswithtaxes.typepad.com), that allows users to calculate what their income tax liability would have been under the original Form 1040 -- issued in1913. (The calculator can be accessed directly at http://politicalcalculations.blogspot.com/2007/04/income-tax-original-form-1040.html).

According to Wikipedia, the first federal statute imposing the legal obligation to pay a federal income tax was adopted by Congress in 1862, to pay for the Civil War. That act levied a 3 percent tax on incomes above $600, and a 5 percent tax on incomes above $10,000, before rates were raised a couple of years later. The tax was repealed within a decade, but a new income tax statute was enacted as part of the 1894 Tariff Act.

After years of the Supreme Court weighing whether the act’s tax on income from property was an unapportioned direct tax, in 1909 Congress proposed the 16th Amendment. Ratified in 1913, the Amendment modified the requirement for apportionment of direct taxes by exempting all income taxes from the apportionment requirement. The at same year, Congress re-adopted the income tax, levying a 1 percent tax on personal incomes above $3,000, with a 6 percent surtax on incomes above $500,000.

But how that 1040 has changed. In 1913, the form was just four pages -- the summary sheet, a gross income calculation sheet, a general deductions sheet and a single page of instructions. That’s enough to make even the 1040-EZ blush, never mind today’s 143-page full 1040.

Among that original form’s fine print, the instructions tell taxpayers that, “The normal tax of 1 percent shall be assessed on the total net income less the specific excemption of $3,000 or $4,000 as the case may be.” Later, it spells out that forms are due by March 1, that the late-filing penalty can range anywhere from $20 to $1,000 and that anyone filing a fraudulent return can be fined as much as $2,000, plus whatever fees and jail time the court sees fit. As for the marriage penalty, back in 1913, “An unmarried individual or a married individual not living with wife or husband shall be allowed an exemption of $3,000. When husband and wife live together they shall be allowed jointly a total exemption of only $4,000 on their aggregate income.”

And CPAs in 2007 might be heartened to see that nearly a century ago, the standard affidavit for preparers is still at the close of the form.

At any rate (no pun intended), it’s an interesting little look into the tax system during the days of President Woodrow Wilson. And those good old days of simplification are worth considering again the next time talk of major tax reform comes around. The truly simple days of 1040 prep might truly be a relic of the past.

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