Why We Pay Taxes

Why Are Taxes Necessary?
Taxes steal a big chunk of our annual income, but there’s a good reason why we need to pay them.

The only sure thing in life is death and taxes – at least that’s what they say. And that age old maxim wouldn’t be too off the mark if taxpayers have anything to say about it.  

In fact, most people feel like dying come tax season, so it wouldn’t be surprising if you (like billions of citizens around the world) feel like the two were interchangeable.

It’s hard to imagine what isn’t taxed these days. From income to land, to even your miraculous lottery winnings; each possible source of revenue gets a cut that goes to the government.
But as surprising as it may sound, there’s actually a good reason why we need to pay taxes. And while it may sound like a great benefit for the government, it’s actually designed to be a benefit for taxpayers as well.
Here are just a handful of reasons why taxes are necessary:

• Paying your taxes means more improvements to the country or your city – Taxes are categorized in different ways depending on the kind of tax and the country you’re from. But all in all, taxes are designed to be able to fund the different improvements in either your country or your city. These improvements can come in the form of roads, public parks, national infrastructure, garbage disposal, public transit and even low cost housing.
• Your taxes come back to you eventually. – Taxes can be viewed somewhat like an insurance policy. You pay your government taxes to fund different services afforded by the government. Some of these services can cover everything from health care to financial or food aid. And while these may not be relevant to you right now, as a taxpayer you can benefit from them in the future should anything happen to you.
• Taxes prove you are citizen worthy of certain benefits. – While all citizens are created equal, some citizens are granted a bit more leverage just by being taxpayers. Income tax returns are used to prove that you’re a citizen that not only pays taxes but also receives a certain monthly/quarterly/annual income. These documents are important when applying for a loan, or when paying for a something sizable on installment.
• You work and earn a salary, and your government should too. – Practically speaking, taxes are a way of paying the government for doing its job. But unlike a real salary, the government tells its citizens what it should earn. If you think this is simply incentive to tax its citizens to high heaven, you have to understand that different amounts of taxation have various effects on a country. Too high and your citizens won’t have any money left to spend. Too low and your government won’t have any money to spend. It’s the government’s job to find the right balance between the two.

In a way, taxation is like the price of citizenship. That hardly sounds like a compelling reason to cough up more cash to the government, but there’s a truth in that statement. As citizens, we should be able to enjoy the various benefits and services provided by our government, but these services can only be rendered if there are funds to render them with.

Author:
Casio Wiser manages a tax forum for the website Federal Tax