A Short Timeline of Tax Law of the United States, Section Three
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W. Marc Gilfillan, CPA, NC, individual and business CPA and Tax expert, shares about the history of taxes…
So, what happened with taxes in the United States?
US tax makers have been collecting what they have been sowing for a long time. The honor system has been replaced by a system in which every tax payer is under surveillance due to the strong inclination of evasion.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, 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 cash weren’t reported, and nothing that went through accounts were photographed. Also, real estate transactions weren’t reported, stock transactions weren’t reported, dividends were not reported, income from other sources (Form 1099) was not reported, and US Customs didn’t 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 worked. The erosion that happened over the previous fifty years to the present 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 unnecessary expense and great misspending of tax 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. Citizens will pay taxes, even income taxes, if the rates are reasonable.
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