CLARICE JOBETH R.KEE TAX2-D DECEMBER 13, 2013 THE IMPORTANCE OF TAXES TO THE GOVERNMENT AND THE ECONOMY “In this world nothing can be said to be certain, except death and taxes”. Everyone; from the poorest to the richest people in every country, youngest to the oldest, regardless of gender and whatever strata one belongs, have experienced the burdens of taxation. From pay check to pay check; people tend to complain of how much little disposable income is left to them, after all the tax deductions. No taxpayer has ever enjoyed handing over their hard-earned money to the government. A number of people has faked their tax returns, understating their income to expel substantial amount of burdens. Herman Wouk describe it as “the most imaginative fictio n ever written” because of its lack of authenticity. If we hate it too much, can we just eradicate taxes? According to the Phew’s Tax Foundation Research last April 2013, over 1.6 million U.S taxpayers cheat on their income tax returns. From this, the U.S treasury is losing an estimated amount of over $ 270 Billion annually. Basically, nobody seems to like paying taxes. In fact, Barry Goldwater pointed out that the taxes created more criminals (tax evaders) than any other single act of government. Will it be a good idea to join these digits? Taxation is the method or means by which the sovereign, through its law-making body, raises income to defray the necessary expenses of government. Expressed in another way, it is a method of apportioning the cost of government among those who in some measure are privileged to enjoy its benefits and must, therefore, bear its burdens. Taxes are a compulsory financial contribution imposed by a government to raise revenue, levied on the income or property of persons or organizations, on the production costs or sales prices of goods and services. Amidst all of the citizen’s resentment against taxes, and even at the time when Winston Churchill expressed his idea that “there is no such thing as a good tax”, and when a crowd of people supported him, taxes, can also be worth of its known advantages, that is when it is used in the rightful ways. The nation, its people, the government, the economy, and the world, benefit in taxes; one way or another. The Government and its Total Dependency Taxes are known to be the lifeblood of the government. Without it, the government is paralyzed, the government would be nothing but a rotten tomato; useless and put to waste. The government bank on principally on money raised through taxes to produce revenue. Tax revenue is the money that our governments collect to provide services and to pay for public expenses. Therefore, the people of the sovereign state, is subsidized by the government through taxation. Ralph Waldo Emerson pointed out that “for every benefit you receive, a tax is levied. Hence, there is no such thing as a free lunch, the services provided by the administration, was only from the proceeds of taxes, paid by its populace. Taxes are also good– they are the dues we pay to avail of the many significant benefits that the government provides for the society. During the reign of former President George W. Bush, hundreds of billions of dollars of tax cuts were enforced due to the American’s hatred of taxation. Most of the Americans are taxophobic and a number of anti- tax campaigns and rallies took place in the U.S. These people have not actually seen the reality of the goodness of taxation. The government programs (most of them) are working effectively to solve our social problems, and that the government is the only way to uphold significant values like economic security and justice – then the money needed to sustenance these activities should be seen as a good. To put it another way, a mere individual can’t support the things that the government does public schools. A large deviation . deputy head of the IMF’s Fiscal Affairs Department. Gilbert Terrier. and countries. traffic lights. hospitals. A nation would be in chaos without an authority. The government can’t just print more money to support its expenditures. An optimum allocation of available resources are needed across inter country regions. The imposition of tax leads to diversion of resources from the taxed to the non-taxed sector. emphasized that “a key challenge in the region will be to increase the revenue productivity and structure of the personal income tax so that it can contribute to growth-enhancing public expenditure while helping attain distributional goals”. think again. cities. Taxation has helped Latin American economies remain resilient in the face of a global economic slowdown. Apart from this.– like caring for the our grandma’s and grandpa’s. Yet with global risks and ambiguity continuing into the future. did you benefit from roads. taxation can be an overriding means in order to achieve the goals of progress and the objectives of economic development.? If you still say no. then ask yourself.we give it to the government for them to support us even further. Hence. national parks. old people. tax is set to increase the consumption and reduce the savings to increase the aggregate demand and vice versa. Taxation is the only effective weapon by which private consumption can be curbed and thus resources transferred to the state. or firm location includes an analysis of taxes. Taxation policy is to be directed to raising the ratio of savings to national income. care has also to be taken to promote capital formation and investment both in the private and public sectors. One way for governments to help grow their sluggish economies is by improving their tax systems. firemen. It plays a key role in promoting economic growth: it spawns the revenue needed to fund governments’ economic growth policies and creates a framework for expansion of private sector activities. Tax policy is also used as a control mechanism to check inflation. strengthening taxation frameworks could offer an opportunity for emerging market economies ( like the Philippines ) across the region to secure government revenues while at the same time boosting economic growth. providing public education. Furthermore. policemen. weather stations. Taxes are the lifeblood of government and so if government is basically good. government agencies supporting children. creating justice. according to the IMF and other international organizations gathered in Brasilia to discuss the role taxation plays in promoting economic growth. it can also be used to accelerate growth within a country. then so are taxes that fund it. libraries. consumption of liquor and luxury goods and to protect the local poor industries from the uneven competition. abused women. coast guards. Focusing on the structure of the tax system. Tax policies can also be used as hedged for critical economic situation like depression and inflation. and higher international reserves. etc. What the government needs is the money from the people to its people. Thus the economy can ensure sustainable development. lower external debt. an alliance that is not always seen because of major prejudices and hate of the people. A strong revenue base system is needed by the government to improve their balance sheets. out of school youth. the people should ought to think of these payments more like the tithing that many people do in their churches. investment growth. At least 75 studies of employment growth. If you hate taxes. In depression. it would cause a rapid inflation on all commodities. fighting terrorism. and protecting the environment – and still maintain their argument that the taxes that support those things are bad. Those who shaped the state and local fiscal policy had a sustained interest in the role of that taxation pays in the economic development regions. So instead of seeing taxes as paralleled to being robbed by the government. tax policies can also encourage savings and investment when there is a contractionary monetary policy (it is used when needed) since developing countries has mixed economy. states. Tax revenues may be used to encourage development activities in the less developments areas of the country where normal investors are not willing to invest. Taxes and the Economy The financial operations of the state are impossible without taxation. through the government. your actions will reflect its consequence back to you. Taxes. . Wrapping Up Taxes-even how bad people cursed it. In many places. Avoiding taxes is like destroying humanity.” Could you imagine a world without government intervention? Even if you escape the obligation of paying taxes. they've cut policemen.in summary. and you are helping the detriment of the very government that is helping you. can help promote peace and stability of a country. can also be beneficial. because. multiplied by the tax elasticity. will yield a large location.from the average tax level. son of a bitch. it's much more fun watching something burndown. or investment effect. Imagine this line from Lewis Black: “They're so broke that they've actually cut essential services. who the fuck needs them? Or firemen. you will face serious legal actions. employment.
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