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Taxes Necessary Evil

Taxes Necessary Evil

Article by Frank Vanderlugt

Ah, taxes. We all pay them. And in contrast to the popular myth that the poor and middle class pay the bulk of the taxes in the United States, in actuality, the rich do.

According to the National Taxpayers Union, for 2004 the top 5% of American earners paid nearly 60% of all personal income tax. The other 95% of us made up the rest.

But that’s just personal income tax. There are many other types of taxes. For instance, most states now levy a personal income tax on top of the amount taxed by the Federal government. Only six states do not. Alaska, Florida, Nevada, South Dakota, Texas, Washington, and Wyoming don’t charge a personal income tax, but most of them collect a state sales tax.

Then there are “sin” taxes collected by both the Federal, State and local governments. Tobacco and alcohol purchases are highly taxed in most areas, especially after the 1999 lawsuit against the tobacco companies, which actually went to trial in 2004.

And let us not forget property taxes. If you own real property, and sometimes personal property, you’re likely to be taxed on it. Some states collect an inheritance tax on money or property you receive from someone’s estate. The Federal government, and some state governments, also collect an estate tax, which is a tax levied on the value of an estate before it’s distributed to the heirs or recipients.

In general, taxes are America’s very cost-efficient method of income redistribution. Income redistribution is a modern-day Robin Hood, taxing the wealthier portion of the populace and distributing it to the poorer segments. The aim is to make society a little more “equal”, at least, income-wise.

Our system of capitalism results in unequal wealth distribution, and taxing people is one method of partially offsetting that. The wealthiest pay the highest taxes, yet do not receive aid in the form of welfare, food stamps, or other assistance. The poor, on the other hand, have very low income and so can qualify for many of the above types of aid, yet they pay little or no taxes. Assistance to the poorest segments of our society would not be available but for the income from taxes.

Taxes also pay for schools, roads, law enforcement, our armed forces, public services, and a host of other items. Most of us have become so used to seeing these items and services around us that we forget our taxes put them there in the first place.

Tax relief is sometimes legislated and can often be requested. For instance, after Hurricane Katrina, many people were allowed to file their Federal and State taxes well after the deadline, simply by stating that they were affected by the hurricane (on a form, of course). Most municipalities offer property tax relief to low-income, elderly or disabled residents within their jurisdictions.

Taxes really are a necessary part of American society. Without them, you’d have to pay for the streets and sidewalks outside where you live. What if your neighbor decided not to chip in? What if the kids came home with a bill for their portion of the teacher’s salary each month? And their portion of the cost of the school building, the lights, heat, janitorial services… You get the idea.

Taxes are a part of a modern-day capitalistic society, and they help provide many of the items that make life here comfortable. While not always perceived as fair, they are often changed, and sometimes at the demand of the taxpayers themselves, so taxes can be responsive to your demands.

About the Author

frank j vanderlugt owns and operates http://www.tax-attorney.biz Tax Attorney