Government Taxation Essay -- Taxes

There are two things in life that are certain: death and taxes. In today's world, the majority of our government's income comes from taxation. A tax is not a voluntary payment or donation, but an enforced contribution imposed by government (Mikesell, 2011). Taxes are an amount of money collected from citizens, and they are used to provide public goods and services to benefit our communities. Taxes are amounts established in a political process of structured laws to determine how the collective cost of government services will be distributed among elements of the market economy. The two most important tax policies are the level of taxation, or how much taxes should be, and the structure of the system, or how revenue is to be raised (Mikesell, 2011). To better understand taxation and its purposes, this paper will discuss in detail the different tax structures- income taxes, sales taxes and property taxes and describe their advantages and disadvantages based on equity, economic ef fects, collectability, and transparency. In the United States, taxes have been around even before the nation was founded. The criterion for taxes was proposed in a 1776 guide of taxation for a market-based economy by Adam Smith in the Wealth of Nations (Mikesell, 2011). During the Civil War, the government relied on excise taxes but they didn’t generate sufficient revenue, so the first income tax was enacted in 1861. By 1895, the tax was ruled unconstitutional by the Supreme Court, and in 1913 the 16th Amendment was passed which gave the United States the power to tax personal income and resolved the revenue problem (Mikesell, 2011). During the Great Depression in the 1930s, the government added unemployment compensation and social security progr... ...l never be levied fairly because the world is turning into the â€Å"haves† and the â€Å"have-nots†. Works Cited Davidson, C. (2006, July 24). The history of taxes. In Yahoo Inc. Retrieved November 23, 2010, from http://www.associatedcontent.com/article/45350/the_history_of_taxes.html?cat=37 Ellis-Christensen, T. (2010, September 10). What is retail sales tax? In Wise Geek. Retrieved November 21, 2010, from http://www.wisegeek.com/what-is-retail-sales-tax.htm Holetzky, S. (2010, September 26). What is property tax? In Wise Geek. Retrieved November 23, 2010, from http://www.wisegeek.com/what-is-property-tax.htm Mikesell, J. (2011). Fiscal administration: Analysis and applications for the public sector (8th ed.). Boston Pollick, M. (2010, August 2). What is income tax? In Wise Geek. Retrieved November 21, 2010, from http://www.wisegeek.com/what-is-income-tax.htm