December 23, 2009

A Brief Timeline of Tax Law of the United States, Section 3

Raleigh NC Tax Preparation

W. Marc Gilfillan, CPA, NC, individual and business CPA and Tax expert, shares about the history of taxes…

So the question remains, what happened with taxes in the US?

US tax makers have been reaping what they have sown for a long time. The honor system has been replaced by a monster in which all taxpayers are under watch because of the strong threat of evading their taxes. In other words, consent has been replaced with compulsion. Honor has been replaced with espionage. If you’re feeling the pressure with today’s taxes, call a Cary NC CPA for all your tax-related needs!

In the 1950s, no bank told the IRS about customer affairs, interest rates went unreported, withdrawals of money were not reported, and nothing that went through any account was photographed. Also, real estate transactions weren’t reported, stock transactions were not reported, dividends weren’t reported, income from other sources (Form 1099) wasn’t reported, and US Customs did not require a declaration of the amount of money carried. Go here if you want help from a modern-day Tax Preparation in Cary, NC.

It was an honor system, and it worked. The deterioration that happened over the previous fifty years to the present is that everything of any fiscal significance is now reported.

Adam Smith said that taxes will be evaded and tax laws shown little credence when there is a general suspicion of a lot of unnecessary expense and great misapplication of tax revenue. For example, $500 toliet seats, high-dollar grants to study the sex lives of ants, etc.

For the sake of catching a few tax resisters and evaders in the 1950s Congress created a tax monster of the US tax system that more and more taxpayers attempt to bypass. As a general rule, widespread tax evasion is a sure sign that a government’s tax system is bad. People will pay taxes, even income taxes, if the rates are acceptable.

Thanks for reading! Stay tuned for more updates!

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