# How did the IRS know what your income was in pre-electronic days?

**URL:** <https://boards.straightdope.com/t/how-did-the-irs-know-what-your-income-was-in-pre-electronic-days/716318>\
**Category:** Factual Questions\
**Created:** [March 30, 2015, 2:40am UTC](https://boards.straightdope.com/t/how-did-the-irs-know-what-your-income-was-in-pre-electronic-days/716318 "2015-03-30T02:40:24Z")\
**Posts on this page:** 2\
**Page:** 2

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**Author:** ![Yllaria](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/yllaria/32/3452_2.png) [@Yllaria](https://boards.straightdope.com/u/Yllaria)\
**Post date:** [March 31, 2015, 5:15pm UTC](https://boards.straightdope.com/t/how-did-the-irs-know-what-your-income-was-in-pre-electronic-days/716318/21 "2015-03-31T17:15:41Z")

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> [@Haberdash](#):
>
> . . . 4) The Social Security Act was passed in 1935, just nineteen years after the Sixteenth Amendment established the constitutionality of the federal income tax. The time between “the existence of the income tax” and “the time when nearly every employer needs to track and report wages anyway” was short.

> [@UDS](#):
>
> I have no data on this, but it’s entirely possible that in 1913, and for many years afterwards, only a small proportion of the workforce earned enough to have any liability for federal income tax. . . . .

One of my dad’s rants was that “they snuck it in by claiming that only the top 10% would be taxed.” Not sure how accurate his math was. Or his history, since he was born more than a decade after it went into effect.

> [@kunilou](#):
>
> In 1943 the IRS started requiring employers to withhold income tax (oddly enough, it was already a requirement for SS taxes.) At that point it would have been necessary to have a form telling both the taxpayer and the IRS how much tax had already been paid, so they would know whether the employee still owed money or was due a refund.

I did not know that, but it makes sense. If only top earners were taxed, at first, they’d be taxing the guys who had accountants. The accountants could figure the income and sign, attesting to it.

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**Author:** ![Moriarty](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/moriarty/32/49_2.png) [@Moriarty](https://boards.straightdope.com/u/Moriarty)\
**Post date:** [March 31, 2015, 5:47pm UTC](https://boards.straightdope.com/t/how-did-the-irs-know-what-your-income-was-in-pre-electronic-days/716318/22 "2015-03-31T17:47:33Z")

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[QUOTE=Yllaria]  
One of my dad’s rants was that “they snuck it in by claiming that only the top 10% would be taxed.” Not sure how accurate his math was. Or his history, since he was born more than a decade after it went into effect.  
[/QUOTE]

[Here](http://taxfoundation.org/article/1913-internal-revenue-service-1040-form) (PDF) is an original 1040 form for filing taxes for the IRS. If I am reading it right, the original tax rate was 1% for income up to $20,000.00 (with a standard deduction of $3,000 or $4,000, depending on whether the person is single or married), which kicked in at $3,000.00 of net income.

A net income of $3K in 1913 is equal to about [$71,000.00](http://www.usinflationcalculator.com/) today. Per [this](http://www.moneychoice.org/then-vs-now/) site, the average income in 1913 was $800/year.

It seems little doubt, then, that the income tax was originally intended to apply to only the top earners, and the vast majority of Americans would be exempt.

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