The bill introduced tax cuts but included a gift tax for the wealthy. It also introduced the U.S. Board of Tax Appeals and a clause allowing for publicity of individual income tax information.
Facts about Revenue Act of 1924
The bill introduced a gift tax to address the issue of wealthy individuals avoiding inheritance tax, estate tax invoked at death, by transferring wealth during their lifetimes. Due to strong opposition this was revoked in the 1926 Revenue Act.
The law allowed for publicity of individual income tax information. This allowed major newspapers to publish lists of names, addresses and tax payments in publications.
The Board of Tax Appeals was created by the Revenue Act of 1924. The Tax Court specialized in adjudicating disputes over federal income tax.
U.S. Board of Tax Appeals was initially established as an "independent agency in the executive branch of the government. The U.S. Board of Tax Appeals originally had 16 members, with Charles D. Hamel serving as the first Chairman.
The law reduced the 73% federal income tax to 40% and reduced the 4% federal income tax paid by the majority of tax payers.
By 1928 the majority of tax payers were paying ½% federal income tax and wealthy Americans were paying 25%.
The 1920s were a golden age for tax cuts initiated as part of the Mellon Plan. The tax laws put more money into the hands of the consumers by lowering the federal income tax.
However, the tax cuts contributed to the rampant spending trend of consumers, which in turn led to over production of goods, which in turn led to the 1929 Wall Street Crash.
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