Taxes represent involuntary charges imposed on people or companies and controlled by a government agency, whether local or national, to fund different operations within the country. From an economic perspective, taxes fall on the one who caters to their burden, be it an establishment such as a business or consumers of manufactured goods (Wallace, 2020). The levied taxes are meant for the improvement of the country’s economy and the life of its citizens.
The first major source of tax revenue is individual income taxes, which are commonly progressive with high-income families paying a bigger proportion of their income than their low-income counterparts. The second main source is the payroll taxes that are obtained from nearly all employees by being charged on wages or salary paycheck (Abbott & Bogenschneider, 2018). The third major source is the corporate income tax, which is a fee charged by the government on a business’ profits. Tax revenue is also obtained from excise taxes, levied on the sales of some products such as fuel, alcoholic beverages, or tobacco. Estate taxes are fees charged on assets, for example, real estate, money, or stock, which are being switched from a deceased individual to their inheritors, while other sources of tax revenue include fees such as tariffs levied on imported products.
The benefits of taxes are many and include the construction and maintenance of infrastructures such as public highways and roads. Taxes are utilized in the financing of the public schools’ system such as their construction, purchase of books, and equipping the laboratories (Yeager, Ferdinand, & Menachemi, 2019). They also help in enhancing public safety through the recruitment of police and other security agencies. Additionally, taxes help in ensuring the quality of care via the employment of health professionals, construction of public hospitals, and funding operations of the Department of Health and Human Services.
Taxes signify involuntary charges levied on people or companies and managed by a government agency. The sources of tax revenue include payroll taxes, estate taxes, corporate income taxes, excise taxes, and individual income taxes. They are intended for the development of the nation’s economy and the living standards of its citizens. The benefits of taxes are countless and comprise the construction and maintenance of infrastructure, public schools, and hospitals.
References
Abbott, R., & Bogenschneider, B. (2018). Should robots pay taxes: Tax policy in the age of automation. Harvard Law & Policy Review, 12, 145–150.
Wallace, C. G. (2020). Tax policy and our democracy. Michigan Law Review, 118(6), 1233–1236.
Yeager, V. A., Ferdinand, A. O., & Menachemi, N. (2019). The impact of IRS tax policy on hospital community benefit activities. Medical Care Research and Review, 76(2), 167–183.