There are plenty of responsibilities that the average person will hold throughout their life. Even then, plenty choose to add more on top. For instance, if you have a child and start a family, you have a responsibility to see that child through to adulthood. If you get married, you have a responsibility to be faithful to your partner. If you run a business, you open yourself up to a number of additional responsibilities. We either add more, or don’t – either way we are always responsible for something or other throughout our lives.
One of these responsibilities? It’s our taxes. Whether we pay our taxes, or our employer pays our taxes, we still have to ensure that we are paying the right amount of tax for the money we earn, and pay it on time. The punishments for not doing so will be through fines and sometimes a stint in jail. Not worth it, right?
How much do you have to pay? It will always depend on where you are based and how much you are earning. Tax rates will sometimes increase with higher brackets of pay; other rates are a flat rate. Some countries have no taxes at all, but most do have some kind of tax rate.
Taxes have been incredibly important throughout history. Since the days of Medieval feudalism, taxes have been paid to a lord in return for a place in his keep and lands. Taxes were certain throughout history, and it was taxes that caused Americans to throw out British rule in the War for American Independence. However, the new American Government – the founding fathers, had a slight problem. How would they pay for anything without taxes? They had to be very cautious about it. The new Government collected cash from duties and tariffs on imports and exports, however this still upset many – who didn’t want to pay extra for their alcohol and sugar, which lead to the so-called Whiskey Rebellion twenty years after independence. This revolt on these indirect taxes created an irony, as the Congress of the United States of America destroyed this revolt with force. Wars, like the Civil War, led to huge debts and thus America fell into line with the rest of the world and 100 years after independence, it started to consider and implement an income tax, which became finalized just before World War One. The IRS was also founded.
The libertarian values of ‘no taxes’ still exist to this day, and it’s a reason why populist candidates gather so much power. Promising a reduction in tax rates is obviously very popular, while on the other side, promising an increase in taxes for high earners is also very popular. Even still, taxes are hugely important. We pay them because we have to – because a country costs money to operate and that money is often gained through taxes unless a country finds billions of oil barrels beneath its slice of the Earth’s crust. That’s why tax is so important, because it is often the main revenue stream for the countries of the world. When you don’t pay up, you’re going to get caught out, so you need to ensure you do everything you can to pay your taxes.
Sometimes you might have a dispute over your taxes – this might be something raised by you or your accountant – either way, you’ve got a date in court to look forward to. Now, tax representation is not something to take lightly; neither is the court date. Take it seriously and if you’ve got a case, ensure it is presented well – you don’t have many excuses for tax avoidance, or not paying at all.
Ignorance is not an excuse either – it’s very easy to understand when your tax is due, if it isn’t easy to understand how to pay. Never leave your tax returns until the deadline, otherwise, you’re setting yourself up for a mess of a situation. It could be worth hiring an accountant to do this for you. Do anything you can to ensure you pay the right tax in the right time.
So, why do you have to pay taxes? Because it is your responsibility as an upstanding citizen or business owner of the country you live in to make contributions to the society that you live in. Tax is how your country funds itself, for better or for worse, but the price of living within that country? It’s your tax rate – argue about it later if you’re unhappy, but always pay up!