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 US?
US tax makers have been reaping 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 heavy inclination of evading their taxes. 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 1950s, no bank told the IRS about customer affairs, interest was not reported, withdrawals of money were not reported, and nothing that went through any account was photographed. Also, 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 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 happened over the last 50 years to now is that everything of any fiscal significance is now reported.
Adam Smith said that people will evade taxes and tax laws shown no credence when there is a general suspicion of a lot of meaningless expense and a lot of misspending of the public revenue. In other words, $500 toliet seats, high-dollar grants to study the sex lives of ants, etc.
For the sake of catching a few 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, widespread tax evasion is a clear sign that a government’s tax system is bad. People will pay taxes, even income taxes, if the rates are reasonable.
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