Posts Tagged ‘history’

A small word called tax

Thursday, March 12th, 2009

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Filing taxes is something that is dreaded by the common man every year. However it seems our ancestors would be as dreadful as we are since the history of tax can be traced to as long back as 3000 BC in ancient Egypt. Tax was historically collected from the people in the form of a percentage of the crop yield, and this had to be handed over to the Pharaoh. Taxes have evolved over the years, and in modern taxation systems, tax is solely collected in the form of money, and is usually performed by a government appointed agency.

While the collection of tax has always been debated, funds collected by the taxation process are used for various purposes mainly for providing greater benefits and improve the level of basic services such as water, energy and waste management for the people. The rate of tax is fixed by the government, but can be increased depending on the economic condition of a nation. During the eighteenth century, England was at war, and the tax burden increased dramatically by 85% over this period.

In the modern society, taxes can be seen everywhere and they have become a part of life. With the introduction of the Value Added Tax (VAT) in 1954, all commercial activities were tagged with the tax label, and the consumer had to pay a tax for any commodity that he or she buys. History however has seen the weirdest of tax schemes. In Britain, a tax was imposed on windows by William Pitt, as it was considered to be a luxury possession. Nero the Roman Emperor taxed urine, as it was used as a raw material for a number of chemical processes. Peter the Great, the czar who modernized modern Russia is said to have introduced soul tax, for the maintenance of armed forces.

Tax havens evolved as a direct economic response to the principle of taxes, as places where taxes were levied at an extremely low rate or not levied at all. Tax havens can be traced to ancient Greece, where sea traders deposited foreign goods in Greek island to evade the two percent tax imposed by Athens. The oldest tax haven is said to be the Channel Islands dating as far back as 1006 A.D, although economic commentators suggest that the first “true” tax haven was Switzerland. Most European governments had to pay for reconstruction costs for damages suffered during the World War I using the taxpayer’s money, but Switzerland’s neutral policy during the war allowed it to maintain a low level of tax.

Evasion of tax is considered to be a crime, and the non-paying entity or individual can be subject to civil penalties such as fines or forfeiture or criminal penalties such as incarceration. In spite of this, individuals and companies try to evade tax, considering it to be a burden on their income. Individuals have tried various means to evade tax, with the strangest being a person trying to claim his dog as a dependent. Yet another instance saw a man trying to save tax for the money that he had made from donating sperms, claiming that he had been depleted.

With economies on a downturn, tax is becoming the focal point of all discussions on reviving shattered economic conditions. Council taxes have been increased in some places to bring some money in the exhausted council coffers, and Japan is considering cutting tax rates to boost economic demand. Tax has never been so much in the limelight, and it is becoming increasingly clear that this small three letter word will play a big role in the months to come.

Currency Counterfeiting - A global nemesis

Sunday, March 8th, 2009

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The history of counterfeiting traces itself to the history of money itself. Counterfeiting had started when money was in its most primitive stages. The ancient Greeks and Romans resorted to shaving down legal coins, reducing their value, and use the shavings to cast new coins. The advent of paper money led to the modern day counterfeiting. With potential ill–effects being as huge as bringing a whole nation down, counterfeiting has proved to be a nemesis among nations, and the punishment for this crime can be as extreme as death.

Apart from being a human crime, counterfeiting by itself has been used among various nations to destabilise the economy of an entire nation. Governments have used it to a great degree of success by overflowing the target nation with fake bank notes, causing the real value of the currency to crash. During, the Revolutionary War, the Government of England resolved to counterfeit to reduce the value of the Continental Dollar. The United States government took a similar course but the fake Confederate currency they produced was of a superior quality as compared to the real thing.

The most professional campaign of counterfeiting was conducted by the Germans in World War II. The Germans manufactured very convincing paper, and used the professional expertise of prisoners held captive in Sachsenhausen concentration camp, to produce the fake currency. The Bank of England managed to obtain some bogus German currency, and found the forgeries so good that it is said that the only way to distinguish it from the real thing was that the forged one was better.

In the modern days, counterfeiting has been used to promote and sponsor terrorism. The Central Bureau of Intelligence (CBI) in India has reported that rupee notes are supplied by the Pakistan government press, free of cost to Dubai-based counterfeiters who, in turn smuggle it into India. This money is later used for funding terrorist activities inside India, and is also reported to be the main source of funding for the recent Mumbai blasts.

With advances in technology, the quality of counterfeiting has improved drastically, making it difficult to tell the real thing apart from its counterfeit. It is claimed that the U.S dollar bills produced in North Korea, are the finest counterfeit banknotes, and are called Superdollars because of their high amount of detail and quality. However, with the advent of the Euro, there has been a substantial decrease in the amount of forged U.S currency.

Counterfeiters use various measures to produce replicas of the original currency. Devices can range from a simple colour photocopier to much technologically advanced printing techniques like those used at the national mint depending on the level of accuracy and detail desired. Counterfeiting has become more of a bother now than ever before as it is easier for small-time operators to pull it off. All that is required is a high-resolution scanner, a high-end colour printer and a personal computer system.

Considering the nemesis that counterfeiting has on the economy, the governments of various nations have taken a number of steps to combat it. Techniques like making intricate designs, using ink patterns that are hard to duplicate have been employed. US greenbacks were traditionally printed in two inks. Many nations print engraved money, which use specially engraved plates that are very difficult to replicate. Some countries also resort to coming up with new designs frequently.

Statistics for counterfeiting remain uncertain, as it is difficult for most people to recognize a forged currency unless they are trained to do so. Some estimates place the proportion of bogus currency in Western Europe at about 3%, but the ratio is much higher in less developed countries. The usual target for counterfeiting is the $100 bill, and many of the forgeries are very good.

With so many techniques applied by various nations, the truth is that until money is being printed, counterfeiters will exist.

The Story of Change- No not President Obama, I’m talking about money here!

Monday, March 2nd, 2009

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The story of American money started more than three centuries ago. Before this, settlers mostly bartered goods for goods. Crops like tobacco and corn and pork and butter were widely used. Learning from the Native Americans who used stringed clamshell beads, or wampum, European colonists adopted the wampum among trades with the Native Americans and then, amongst themselves.

The Massachusetts Bay Colony contracted John Hull to begin minting coins. Hull set up a mint in Boston and began producing “NE” (New England) coins in 1652. The NE coins were very easy to counterfeit, only having NE on one side and XII on the other. The coin was redesigned from 1667-1682. Eventually as more and more people came to the New World and brought their money with them, the settlers and colonists relied on foreign money for buying and selling. Money from Europe, Mexico and South America could be found at any given time. These coins mixed in with the NE coins and wampum and were all used for purchasing, barter and trade.

Early in the 18th century, a large amount of copper coins were imported from England and Ireland for the purpose of making more coins for the colonies. In 1776, dollar-sized coins were produced with a sundial and the inscription “Mind Your Business” on the front and “American Congress We Are One” on the back. These pieces were struck in three different metals; those struck in pewter are scarce or rare, while the silver and brass examples as extremely rare. The Articles of Confederation, adopted on July 9, 1778, gave Congress the ability to place the value on the coins that were struck by each state. At that time, the states each had the right to strike their own coins, there was just no fluidity in their values until the Articles came about.

Finally in 1792 the U.S. Mint was established by Congress. The U.S. Mint makes all U.S. Coins and became an operating bureau of the Treasury Department in 1873. To this day, U.S. coins typically have a mint mark showing which mint it was produced by. The Philadelphia Mint has been the longest in continuous operation, since 1792. The Denver Mint began coin producing in 1906. The newest mints were the West Point, New York, and San Francisco which gained official status in 1988.

From 1965-1968 there were no identifications used to tell where coins were minted. In 1968 the mints resumed putting their initials on the coins. Coins minted in Philadelphia had a P or no letter, Denver has a D, West Point a W and S for San Francisco. To this day, look at your coins and right under the date there should be a letter telling you where that coin was minted and if no letter is present, your coin was minted in Philadelphia!

Coins’ designs and values have changed over the years from the half-penny to silver dollars. The designs will continue to change as society deems it necessary . For now, the coins in your pocket have come a long way to get there because there was a time when there was a lack of United States coins.

Fascinating Money Facts

Sunday, September 7th, 2008

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money factsWhile cruising around the Internet the other day I found these little tidbits of information about money. Thought I’d share them with all of you.

Did you know that money in the larger denominations such as the $50.00 and $100.00 dollar bills can last up to 8 years while the average life of a $1.00 bill is 18 months? Why is that I wonder? Any ideas?

Now this is interesting. 97% of all paper money has traces of cocaine in it. Hmmm wonder if the government wants us all high so we won’t pay attention to what they’re doing. And if our money has cocaine in it, where is the government getting their drugs from? I thought drugs were illegal? While I’m sure the cocaine is probably a natural ingredient in the materials used to make the money, it still makes you wonder. Am I the only one who thinks about this stuff?

Here’s some more fodder for conspiracy theorists. On the clock tower of Independence Hall that is printed on the $100.00 bill the time is set at 4:10. According to the Bureau of Engraving and Printing, there are no records explaining why that particular time was chosen. Does anyone know the significance of 4:10? I don’t, but would very curious to hear your theories.

We American’s must really love our one dollar bills because almost half of all money printed in the United States is a one dollar bill.

Martha Washington is the only woman to ever appear on a U.S. currency note. Her face graced the one dollar Silver Certificate of 1886 and 1891, and was on the back of the one dollar Silver Certificate issued in 1896. Now that would be a very unique piece of history to have if you can find one.

Now I know very few people actually have $10 billion dollars, but if you did and you spent $1.00 every second of every day it would take you 317 years to spend it.

The name “Greenback” often associated with the one dollar bill comes from Demand Note dollars created by Abraham Lincoln in the late 1800’s. He created these special notes to finance the Civil War. This money was printed in black and green on the back side of the bill. Hence the name Greenback.

Talk about sturdy! Did you know that you’d have to fold a bill of any denomination over 8,000 times forward and backwards before it would tear?

And for all the women out there: Statistics have shown that in 75% of American homes it’s the women who manage the money and pay the bills.

Interesting Facts About the Dollar - Paper Currency

Saturday, June 7th, 2008

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legal tenderThere are many interesting facts about the paper currency of the United States. Here are just a few facts about dollars that you may not have known before.

The first $1 notes did not have George Washington’s face printed on them. The Secretary of Treasury in 1861, Salmon P. Chase, was the face on the original $1 note. George Washington’s face was not printed on the $1 note until 1869.

The dollars in circulation today all have the same basic face and back designs since 1928, which the exception backs of the $1 and $2 denominations.

A tiny “FW” printed on the front lower right corner of any bill indicates that it was printed at the Bureau of Engraving and Printing’s Western Currency Facility. This facility is located in Forth Worth, Texas.

All paper currency in circulation today has the words: “THIS NOTE IS A LEGAL TENDER FOR ALL DEBTS PUBLIC AND PRIVATE”. This sentence was changed seven times before it was finally edited to the wording we see today, which was first printed on the 1963 series.

The original phrase was: “This note is legal tender for all debts, public and private, except duties on imports and interest on the public debt, and is exchangeable for U.S. six per cent twenty year bonds, redeemable at the pleasure of the United States after 5 years”. This phrase was printed on the larger notes printed in 1862.

Larger notes circulated until 1929, and were 3.125 inches wide by 7.4218 inches long.

Currently, all paper dollars measure 2.61 inches wide by 6.14 inches long. They are also 0.0043 inches thick.

In order to have one full pound of bills, you need 490 notes.

Interesting isn’t it? Be sure to keep reading our blog for more interesting facts about dollar bills!

The History of United States Dollars

Saturday, June 7th, 2008

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dollar bill historyThe paper currency in the United States, the dollar, has an interesting history. Let us take a look at the history of dollars, which begins all the way back before the States were all created to form this country.

The first sign of paper money was in 1690. The Massachusetts Bay Colony was the first to issue this paper money. Many years later, in 1775, paper currency was issued to finance the Revolutionary War. The problem with this issue of currency was that is was based on the expectation of tax collection. These notes were also easily counterfeited.

After the Constitution was adopted, Congress chartered the first bank. It was called the Bank of the United States. The bank was charted until 1811 and authorized to issue paper currency. This institution was the first to perform the functions of a central bank.

Due to the need to finance the Civil War, Congress decided to permit the U.S. Treasury to issue non-interest bearing notes. These notes were a paper currency called Demand Notes. Large Treasury Notes in circulation were released in five issues between 1862-1923.

Between 1865 and 1933, Gold Certificates were circulated against gold coin deposits. In between this time, it was decided that the Treasury Department’s Bureau of Engraving and Printing would be solely authorized to print U.S. currency.

The Federal Reserve System was set into place in 1913, so that there would be unified regulation over money circulation and credit. Federal Reserve Notes are the paper money that we know and use today. No other U.S. currency is created or circulating.

The denominations of paper currency that are currently issued are $1, $2, $5, $10, $20, $50, and $100. Prior to 1946, there were other, higher denominations in circulation. These were $500, $1,000, $5,000, and $10,000 bills.

There is much more to the history of currency in the United States, but this post offers a nice overview of how we have come to use the dollar bills that we use today. Remember that money is not what it used to be. It has changed over time.