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 collecting what they have sown for a long time. Our honor system has been trumped by a system in which every tax payer is under surveillance due to the strong threat of evasion. In other words, compulsion has replaced consent. Honor has been replaced with espionage. 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, there wasn’t a bank in the US that informed the IRS about customer affairs, interest rates went unreported, withdrawals of money weren’t reported, and nothing that went through accounts were photographed. In addition to this, real estate transactions weren’t reported, stock transactions were not reported, dividends were not reported, income from other sources (Form 1099) wasn’t reported, and US Customs did not require a declaration of the amount of money carried. Go here if you want help from a modern-day Tax Preparation in Cary, NC.
Before it was espionage, it was an honor system, and it functioned quite well. The deterioration that occurred over the last fifty years to the present is that anything of any fiscal significance is now reported.
Adam Smith observed that people will evade taxes and tax laws shown no credence when there is a general suspicion of a lot of unnecessary expense and great misapplication of tax revenue. In other words, $500 toliet seats, high-dollar grants to study the sex lives of ants, etc.
Because the government wanted to catch a handful of tax resisters and evaders in the 1950s Congress created a tax monster of the US tax system that more and more taxpayers try to bypass. As a general rule, mass tax evasion is a clear signal that a government’s tax system isn’t working. People will pay taxes, even income taxes, if the rates are reasonable.
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