One way our income taxes increased over the years

[raccoon]

has been the loss of exemptions the average Americans used to have.

About 20 years ago---

ALL your interest payments on house, credit card, whatever, were deductible.

ALL medical expenses you paid out of pocket were deductible.

There was something called “income averaging” where if you made really crappy wages and then got a well-paid job, you averaged out the income and didn’t have to pay as much in taxes. (this was rescinded in 1987, for everybody except farmers).

(http://www.findarticles.com/p/articles/mi_m2893/is_4_21/ai_90116652)

“* Unemployment compensation was made partially taxable, starting with 1979, and was made fully taxable, starting with 1987.” (Same source as the above info. about income averaging.)

(1987---who was President then? Some movie actor, I think.)

* State sales taxes were no longer deductible, beginning with 1987. (Same link again. Good article, that.)

The amount of the personal exemption was $600 in 1948; $3000 in 2002.
(If you know what it is now, please post.)

I’m not a tax preparer and never have been. If you are/were one, please feel free to chime in. But from what I see, it seems like the average American is paying more and more taxes with less benefits coming to him/her.

[DBoon]

1. This is true, and we have regan to thank for this

My first full time job out of school (early 1980's), I used most of what you described. Two years later, I used 1040-EZ (because I lost all these deductions) and paid LOTS more in taxes.

[liberal N proud]

2. Tips for service personnel became taxable in the last 20 years also

I think Reagan used some of those in his Revenue Enhancements packages.

[Gormy Cuss]

3. Tips were taxable before then. The change was that the IRS

assumed servers had a certain level of tip income without verification. If your actual tips were less and you couldn't prove it (which of course was true for most unless they kept a daily tax log) then you owed taxes on higher income than you had received. The IRS also ramped up the warnings on declaring tip income at the same time.

[Sammy Pepys]

4. Credit card interest payments were deductible?

I think for business purposes they still are, but definitely not for personal expenses.

[Kingshakabobo]

6. Yes. So was interest on car loans. n/t

[China_cat]

5. Personal exemption, $3200

Just did ours.