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Each person pays taxes in one type or another- generally income tax and sales taxes. There are several services accessible to society that could not be managed well under any other organization. The federal government uses your tax dollars to provide you Social Security, health care, national defense and social services such as food stamps and housing. The city or county where you live provides water and garbage service, police and fire protection and public schools. But why must they be paid for with taxes? Why shouldn’t we just pay individually for what we use? The answer is simple: Because no one could afford it. Each person would have to pay the full fee for the service regardless of their ability to pay. Our tax system is based on our “ability to pay.” The more money we earn, the more taxes we pay. And the opposite is also true. If we earn a small income, we pay fewer taxes.

There had to be a time in history when people didn’t pay out their taxes but slightly with the formation of tribes into villages and formation of something similar to government in these villages led to taxing people and slowly citizen started to pay their taxes to get basic amenities like roads, security and various other services. Governments taxed their citizen for a variety of reasons like the Roman Emperors did not tax their citizen but instead taxed conquered peoples in lieu of harmony. It can be said that tax system evolved quite a bit since Roman Empire and now we have different categories of taxes for variety of services for example
-Income tax - which is a progressive tax, means that the tax rate increases as the amount subject to taxation increases.
-Real estate taxes - are imposed by local government for providing basic facilities like sewage, hospitals, schools, roads and hospitals.
-Sales taxes - is mainly imposed at state level of the government which goes towards the State’s budget and will vary from state to state

Apart from these most common kinds of taxes there are various other types of taxes too like corporate tax, gift tax, excise tax, capital gains tax and payroll tax. Normally the earnings from taxes benefits all uniformly but this is not the case with people paying their taxes e.g. a bachelor paying his property tax for local school’s budget although he has no children and people who disagree with the government’s policies, but are required to shell out taxes to fund Administration’s policy. But paying taxes is important as it contributes to country’s progress and development and provides you necessary amenities.

Author is operating a website related with Outsorcing Tax Preparation and Online Accounting services

Manan_Kumar

Tags: tax

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Tags: tax