America Tax Running head: Taxes Taxes: Who benefits and who gets ripped off Taxes 2 Abstract Taxes are the dollars that we pay to government to supply the services that are not or can not be provided through the free enterprise system. Taxes have been around since the beginning of organized societies. They come in various forms. Most common are income taxes both federal and local government. These taxes are assessed on the amount of income a person earns.
Other taxes come in the form of user taxes; these taxes are imposed on the people that are using the goods being taxed, such as gas tax, alcohol tax, sales tax, and luxury taxes. Property taxes make up the major revenues for local and city governments. Furthering the burden of taxation are taxes that are attached to such bills as utility bills and rental expenses. Taxes 3 Introduction Taxes; who benefits and who gets ripped off focuses mostly on Federal and county taxes and not on state taxes. This report aims to give the reader some insight on taxes: Why we have them, what types of benefits they supply, who benefits from them, and who gets screwed by them. It informs the reader of the different types of taxation, where the money comes from and where it goes.
How can people avoid some tax increases? But most of all, this report informs the reader that there is an incredible amount of money being wasted by the federal government through overspending and irresponsible behavior of government departments. This overspending has created a deficit that has caused billions of dollars in damage to the credit of the country. As a result of these excess taxes, the American taxpayer is getting ripped off by paying for waste in government. Most people in this country are being ripped off in the amount of taxes they pay due to corruption government and the flagrant overspending and waste of government departments. This over spending and waste is the cause of high tax rates Why we have taxes Ever since the beginning of organized societies, governments have been formed to rule over and to protect the interests of these societies. In order for these governments to function there was a need for revenue to meet the expenses incurred by these governments.
This need for revenue was met by levying taxes on individuals and businesses. It has always been a question to the population being taxed as to whether or not the government was doing a good job in assessing and managing the money it collected from taxes. Taxes 4 The purpose of this report is to determine if the government is acting fairly in its taxation of the American population, and to point out the waste in government spending. In an article published November 1995, an unknown author explained the need for government “revenue” by defending what the revenue supplies for the people. In America we live within a free enterprise society.
A free enterprise system is based on the idea of competition is good and that only the most efficient businesses will survive. The free enterprise system works with the idea that the consumer is somewhat knowledgeable about the products they buy. However, in today’s modern world the consumer cannot be always be expected to make an informed decision about something. This is where federal laws are put in place to protect the interest of the public. Examples of such laws are regulations covering quality and safety of home construction, cars, and electrical appliances.
The economics of taxation, (p. 2) Such societies do not supply all the needs and services that are required. Good examples of these types of services are national defense, and local and state government. Other examples of services the government supplies are managing our natural resources, including water supplies, construction and maintenance of roads and bridges. Revenues pay for social programs such as social security, welfare, medicare, and other government funded program that have been put in place with the idea to help the public in time of need.
Government grants for education, job retraining programs, and small business loans are some other types of program that have been created to help support the growth of the population. Taxes 5 Education is another important service that is provided by local and federal governments. The responsibility for primary education is on city and county governments. Secondary education, such as colleges and universities, fall on the state government; however, the federal government helps with primary, secondary, and vocational education by providing grants that are an important part of the success of the educational system in this country. Types of taxes Taxes have been around since the beginning of organized society. They come in various forms.
Most common are income taxes both federal and local. These taxes are assessed on the amount of income a person earns. Other taxes come in the form of user taxes. These taxes are imposed on the people that are using the goods being taxed for example gas tax, alcohol tax, sales tax, and luxury taxes. Property taxes make up the major revenues for local and city governments. Furthering the burden of taxation there are taxes that are attached to such bills as utility bills and rental expenses.
The following information is an overview of what has been happening to tax revenues in city and federal government. Property taxes for the most part have sky rocketed across the country. Dearborn (1993) reported that, in the period from 1980 to 1990, local property taxes increased nationally by an impressive 128%, with 32 states experiencing increases over 100%. Property taxes make up as much as 92% of city or county revenue. School and educational cost can take up as much as 97.5% of a county’s revenue. Taxes 6 Out of 41 school districts surveyed, only 3 depended entirely on property taxes as a local tax source. Between the period from 1984 to 1990, the city of Boston had the highest increase in assessment ratio of property values of 158% and, while the city reduced the tax rate by 51%, it still yielded a net increase of 56% more in tax revenues from property taxes.
Percentage change in local property tax revenue Percent change Percent change 1980-1990 1990-1991 RI 107.3% 9.4% MA 46.9% 6.4% NH 212.0% 16.7% VT 140.6% 11.3% CA 172.1% 8.9% NY 109.4% 8.0% NC 133.8% 7.6% Taxes 7 In a recent report on property tax rip-offs, Razzi (1995) gave tips on how to reduce the amount of property tax that a person pays. According to the National Taxpayers Union, only 5% to 10% of homeowners appealed their assessments, but more than half of those who do appeal receive some type of reduction in their assessment. Razzi stated that Dale Cheema has saved $4,300 in five years by challenging the assessments on his California home and rental properties. (p.4) Sales tax makes up for a big chunk of revenue in states that are looking to place levies on users. Fortune magazine reported on the extremes of state taxes.
If you like to pay taxes, be sure to buy gas in Connecticut and cigarettes in Michigan, and shop in Rhode Island or Mississippi. Taxes 8 Where has all the money gone? The government, both federal and county collects from millions to billions of …