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Paying Taxes Term Paper

¶ … Americans hate paying taxes. Idioms that for example place death and taxes in the same category prove this. There are some very specific reasons why Americans do not enjoy paying taxes, and these are examined below. Apart from the mere principle behind this sentiment, are also some concrete and even valid motivations for attempting to evade the obligation to pay taxes. These include reasons relating to government corruption and the tendency of the very rich to evade their own tax paying responsibilities. Furthermore it appears, according to some, that the economy does not benefit from current tax legislation, and that this is mainly a result of the corruption mentioned above. The Necessity of Taxes

Doubtlessly, taxes are necessary. The Government needs funding in order to provide its people with the highest quality of goods and services. Recreation and roads for example are maintained by means of taxes. Taxes, while applied for the benefit of society, are therefore not so much an evil as a necessity. One could therefore agree with Johnston in his assessment that taxes are the price for a civilized society. Nonetheless, Americans have a very negative attitude towards this issue, and perhaps not without reason.

Excessive and Unfair Taxes

The first and most basic reason for a negative attitude towards paying taxes is that it takes a large chunk from already strained salaries. The perception is then that the rich become increasingly rich as a result of overly taxing the poor and middle classes. Large companies such as Enron for example neglect their tax paying duties for years without being caught. This exacerbates the already negative feelings people have regarding taxes.

A further perception is that taxes are excessively and unfairly high. An example of this is the issue of transfer taxes. In this case, taxes are levied on property that is transferred at death (estate tax), during life (gift tax) and to grandchildren or other...

According to the author, these taxes generate little revenue, while having severely adverse economic effects. It is therefore an example not only of unfair tax laws, but also of a lack of proper or indeed intelligent tax management on the part of legislators.
Transfer taxes, according to Wagner, impose an unnecessarily heavy burden upon private saving and investment, and thus the economy of the country as a whole is impacted negatively while the gains from these taxes are minimal. Once again, it is those who can least afford it who are burdened most heavily by transfer taxes. Small businesses for example, are burdened with very heavy transfer taxes, because the valuation of these businesses at the death of their owners is a complicated process. The high statutory rates imposed also results in family-owned businesses having to be sold in order to cover such costs. This then results in less efficient ownership and management of such businesses, once again having an adverse effect on the economy. Because small business is the vehicle for entrepreneurship and economic growth in the country, the excessively high transfer tax associated with it burdens the economy.

Transfer tax then results not only in burdens placed upon the small business sector, but has severe ramifications for other areas of the economy. The overall result is that the higher levels of unemployment and lower wages connected with transfer tax issues eventually result in lower tax revenue for the government. It is therefore a losing situation for all involved.

This kind of tax therefore does not result in an improvement either for the government or for society in general. The purpose of taxation, as mentioned above, is the improvement of the environment and services for the benefit of civilization. If this benefit does not result, the tax is unfair and should not be imposed. There is no success or creation of wealth involved in this kind…

Sources used in this document:
Bibliography

Johnston, David Cay. Perfectly Legal Penguin Group, 2003

Schnepper, Jeff A. "The next tax bill - consumption taxes." USA. Sept, 1993

Wagner, Richard E. "Transfer taxes sap vitality from America's economy - estate taxes and transfer of property rules." Insight on the News, Spt 27, 1993
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