As a good historian, as I’ve been working on the history of my client, a leading accounting firm in Boston, I have also been delving into the history of accounting, tax law, and banking in Boston and the U.S. and it’s been fascinating!!!
I wanted to share some fun facts with you to show that:
Accounting, tax law, and banking
history can be fun! Out of the “fun” can come information you can share with your customers, work into your own story (website, marketing materials), or help you connect to new markets and joint venture partners. You could also give a talk at your local historical society and attract new customers that way, or write something for your local newspaper connecting your business to local history! Adding this kind of history in these and other ways will really
set you apart!
Fun facts about accounting, taxes,
and banking:
• 1689: The Andros Rebellion in Ipswich, Massachusetts, is the first protest against taxation without representation in America.
• 1765-1770s: British Parliament levies an increasing number of taxes on the American colonies; the most famous protest takes place in 1774 when “Indians” dump tea into Boston Harbor; war breaks out in 1775.
• 1781-89: While the country is being governed under the Articles of Confederation, the new national government collects taxes by requisitioning sums from each state; the government did not have the power to tax individuals.
• 1781: The first de facto central bank in the U.S., the Bank of North America, is chartered by the Continental Congress. It was succeeded by the First Bank of the United States in 1791, initiated by Alexander Hamilton, chartered by Congress, and signed into law by President Washington.
• 1786: The Massachusetts Bank funds the first trade voyage to China.
• 1789: Congress votes to give the federal government the power to tax individuals, however the focus of taxation was on the “imposts and duties” of imported goods, and excise taxes on “manufactures, sale, and consumption.”
• 1794: The internal tax on distilled spirits and tobacco products, unfairly targeting rural areas, leads to a tax protest known as the Whiskey Rebellion.
• 1800-1: Newly elected President Jefferson abolishes all internal taxes.
• During the “Free Banking” Era of 1837 to 1862, only state-chartered banks existed.
• 1861-1865: The first income tax is levied by President Lincoln to raise funds to pay for the Union Army; he creates the Office of the Commissioner of Internal Revenue. This tax allowed for personal and business deductions, setting the stage for future tax policy.
The Civil War Acts also established the concept of an annual accounting for income by incorporating annual gains, profits, and income language, and the need for more accountants!
• 1880s and 1890s: Numerous accountants from England settle in Boston, expanding and influencing the profession.
1895: An 1894 income tax amendment attached to a tariff bill is declared unconstitutional by the Supreme Court. They rule that the tax violated the requirement that all taxes “be apportioned equally among the states.”
• 1907: The Panic of 1907 is the worst run on banks; it leads to the creation of the Federal Reserve Act several years later in 1913, under President Wilson.
• 1908: The first credit union in the U.S. is established, in New Hampshire.
• 1913: Wyoming becomes the 36th state to ratify the Sixteenth Amendment to the Constitution, paving the way for a permanent system of income taxation in the United States.
• 1914: The first income tax returns are due on March 1. As an IRS historian explained it, “Through the next 25 years, income tax rates remained at levels that affected only the very wealthy. Essentially, payment of income taxes in the years preceding World War II was a sign of affluence. Some citizens proudly reported that they had paid their taxes as evidence of their financial success.”
• 1917: The first two women in Massachusetts pass the CPA examination – Alice M. Hill and Gertrude L. Briggs.
• 1935: The Social Security Act of 1935 imposes a wage tax – half was withheld for the individual, half was paid by the employer.
• 1954: The Internal Revenue Code of 1954 imposes a progressive income tax.
I could go on and on, and I’ll spare you the list of taxes levied by the government to pay for every war we’ve been in (because it’s awfully depressing!), but isn’t this interesting material???
Do you see how a business links up with what’s going on locally, nationally, and internationally? We are all part of something much bigger, and it’s fun to put our businesses into historical context.
What can you learn about your industry’s history, and how can you share it in ways that will entertain and educate your customers — and impress them with your knowledge?
Something to consider!
