You Can't Make This Stuff Up!

[Lee Stewart]

A few months after the attack on Pearl Harbor, President Franklin D. Roosevelt proposed a 100% income tax. In a letter to Congress, he wrote that in this time of "grave national danger ... no American citizen ought to have a net income, after he has paid his taxes, of more than $25,000 a year" (equivalent to about $419,370 today).

[Lee Stewart]

The IRS pays people to provide information on someone who did not pay taxes. The whistleblower can get up to 30% of what the IRS collects in back taxes, penalties, and interest.

[Lee Stewart]

You Do the Crime, You Pay the Tax. Even money earned illegally is subject to tax. Some states require drug dealers to pay taxes on the drugs they sell. The tax may be due as soon as the drug is in their possession, meaning someone caught with drugs may have to pay a fine for unpaid taxes on top of punishment for their other crimes. To pay the tax anonymously, dealers can buy tax stamps and affix them to containers of controlled substances.

[Lee Stewart]

An IRS rule change in 1987 required taxpayers to list dependents' Social Security numbers for the first time. As a result, about 7 million children — a tenth of all dependent children in the country at the time — "disappeared."

[Lee Stewart]

Delaware has a low 8.7% flat tax on corporations, likely the reason about half of all publicly traded companies in the country consider it home. A single address in Wilmington, 1209 North Orange St., is the legal address of more than 300,000 companies.

[Lee Stewart]

Madison Square Garden, the iconic New York sports, music, and entertainment venue, has not had to pay property taxes since 1982. The arrangement was supposed to end after 10 years, according to then-mayor Edward Koch, but due to the disputed wording of the agreement, it remains in perpetuity. The break has cost New York City an estimated $555 million.

[Lee Stewart]

Some states offer residents very odd or specific tax credits or deductions. In Alaska, eligible whaling captains can deduct up to $10,000 for whaling-related expenses. In Hawaii, property owners may be able to deduct up to $3,000 in expenses related to maintaining a tree with historic or cultural value.

[Lee Stewart]

What is the real difference between a Kit Kat and a 3 Musketeers? The former contains flour in its wafers, an ingredient that leads some states to label the Kit Kat a grocery item rather than candy. As a result, retailers may have to charge different taxes on the bars.

[Lee Stewart]

Some states apply sales tax to children's diapers because they are considered clothing. The same tax does not apply to adult diapers.

[Lee Stewart]

In New York, cutting a bagel turns it into prepared food, which means the store must add an 8.875% sales tax to the price.