A Short Timeline of Tax Practices of the United States, Chapter Three
W. Marc Gilfillan, CPA, NC, individual and business CPA and Tax expert, shares about the history of taxes…
So the question remains, what went wrong with taxes in the United States?
US tax makers have been collecting what they have sown for a long time. The honor system has been trumped by a system in which every tax payer is under surveillance because of the heavy inclination of evasion. In other words, consent has been replaced with compulsion. Honor has been replaced with espionage. If you are 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 the affairs of citizens who went to that bank, interest rates went unreported, withdrawals of money were not reported, and nothing that went through accounts were photographed. In addition to this, real estate transactions were not reported, stock transactions weren’t reported, dividends weren’t reported, income from other sources (Form 1099) was not 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 functioned quite well. The deterioration that happened over the last fifty years to now is that everything of any fiscal significance is now reported.
Adam Smith observed that taxes will be evaded and tax laws shown little credence when there is a general suspicion of a lot of meaningless expense and great misapplication of the public revenue. For example, $500 toliet seats, huge 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 spawned a tax abomination of the US tax system that more and more taxpayers attempt to bypass. As a general rule, mass tax evasion is a clear signal that a government’s tax system is bad. People will pay taxes, even income taxes, if the rates are reasonable.
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