Here we offer the tax brackets and standard deduction information for the tax years 2011 and 2012, along with a few “revolutionary” thoughts on the income tax.
Income tax history and philosophy
Thanks to the 16th Amendment the government can tax income:
“The Congress shall have 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.”
The Bureau of Labor Statistics uses the inflation rates of the Consumer Price Index for All Urban Consumers (CPI-U), along with a host of other statistics, to calculate yearly tax brackets.
Income levels in tax brackets raise each year due to inflation, and inflation over the past year averaged 2.43%.
Inflation is a rise in the general level of prices of goods and services in an economy related to an increase in the volume of currency and resulting in the loss of purchasing power. The rate of decrease in the purchasing power of money is approximately equal to the rate of inflation.
Put another way, as inflation rises, purchasing power (a.k.a. wealth) decreases.
“1913 wasn’t a very good year. 1913 gave us the income tax, the 16th amendment and the IRS.” – Texas Congressman Ron Paul
Before revealing the modern income tax brackets, it’s worth noting that the Supreme Court ruled income taxation unconstitutional in 1895 before the Congress enacted it as law in 1913.
Federal Income Tax Brackets for 2012
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Federal Income Tax Brackets for 2011
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Note: Annual inflation is also used to calculate the standard deduction and personal exemptions.
Standard Deduction and Exemption for 2012
The value of each personal and dependent exemption, available to most taxpayers, is $3,800.
The standard deductions for 2012 are:
- $5,950 for singles and married individuals filing separately
- $8,700 for heads of household
- $11,900 for married couples filing a joint return.
Standard Deduction and Exemption for 2011
The value of each personal and dependent exemption, available to most taxpayers, is $3,700.
The standard deductions for 2011 are:
- $5,800 for singles and married individuals filing separately
- $8,500 for heads of household
- $11,600 for married couples filing a joint return.
Note: These numbers are projected and subject to new tax legislation therefore they could change so be sure to check www.IRS.gov for the latest information before filing taxes.
- 2012 Consumer Price Index Summary by The Bureau of Labor Statistics
- Overview of BLS Statistics on Inflation and Prices by The Bureau of Labor Statistics
- Tax Foundation Projects 2012 Tax Parameters by The Tax Foundation
- 16th Amendment from The U.S. Government Printing Office
- Inflation on Wikipedia
- How To Calculate Inflation Rate on Inflationdata.com
- Pollock v. Farmers’ Loan & Trust Co. – 157 U.S. 429 (1895) on Justia.com U.S. Supreme Court Center
- Publication 501 Exemptions, Standard Deduction, and Filing Information on IRS.gov