A Brief Timeline of Taxation Practices of the USA, Part Three
W. Marc Gilfillan, CPA, NC, individual and business CPA and Tax expert, shares about the history of taxes…
So, what happened with the tax system in the United States?
US tax makers have been reaping what they have sown for quite a while. The honor system has been replaced by a system in which every tax payer is under surveillance due to the strong inclination of evasion. Basically, compulsion has replaced consent. Honor has been replaced with spying on citizens. If you’re feeling the pressure with today’s taxes, call a Cary NC CPA for all your tax-related needs!
In the mid-20th century, no bank informed the IRS about customer affairs, interest rates went unreported, withdrawals of money were not reported, and nothing that went through any account was photographed. Also, real estate transactions were not reported, stock transactions were not reported, dividends weren’t reported, income from other sources (Form 1099) wasn’t reported, and US Customs did not require a declaration of cash carried. Go here if you want help from a modern-day Tax Preparation in Cary, NC.
It was an honor system, and it worked. The erosion that happened over the previous fifty years to the present is that anything of any fiscal significance is now reported.
Adam Smith said that people will evade taxes and tax laws shown little respect when there is a general suspicion of a lot of meaningless expense and a lot of misapplication of the public revenue. In other words, $500 toliet seats, huge grants to study the sex lives of ants, etc.
For the sake of catching a few tax resisters and evaders in the 1950s Congress made a tax abomination of the US tax system that more and more taxpayers attempt to bypass. As a general rule, widespread tax evasion is a sure signal that a government’s tax system isn’t working. Citizens will pay taxes, even income taxes, if the rates are reasonable.
Thanks for reading! Stay tuned for more updates!
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