Why Is It Necessary To Pay Taxes?

January 22, 2012 · Posted in Taxes 

When it comes to income tax, the first attempt to impose it on America occurred during the War of 1812. After more than two years of war, then the federal government owed an unbelievable $100 million of debt. The government doubled the rates of its major source of revenue, customs duties on imports, which obstructed trade and ended up yielding less revenue than the previous lower rates in order to pay for this.

To think that the Revolution was started all because of Tea Texas in Boston.

During the war, excise taxes were imposed on goods and commodities, and housing, slaves and land were taxed. After the war ended in 1816, these taxes were repealed and instead high customs duties were passed to retire the accumulated war debt.

All about Taxable Income

The amount of income used to arrive at your income tax. Taxable income is your gross income minus all your adjustments, deductions, and exemptions.

Below are some specific taxes.

Estate Taxes.

Considered as one of the oldest and most common forms of taxation is the taxation of property held by an individual at the time of death.

There are still Estate Taxes in the US even though there are proposals to do away with them.

Such a tax can take the form, among others, of estate tax (a tax levied on the estate before any transfers). An estate tax refers to a charge upon the deceased’s entire estate, regardless of how it is disbursed. An alternative form of death tax is an inheritance tax (a tax levied on beneficiaries receiving property from the estate). Taxes imposed upon death provide incentive to transfer assets before death.

Estate Taxes are what Canada no longer has.

Most European countries have Estate Taxes, one prime example is Great Britain which has such high Estate Taxes that it has just about ruined the financial well-being of most of Britain’s Nobility which has been forced to sell vast Real Estate holdings over time.

Among others, such a tax can take the form of estate tax (a tax levied on the estate before any transfers). A charge upon the decedent’s entire estate, regardless of how it is disbursed, is an estate tax. Death tax has an alternative form and that is an inheritance tax or a tax levied on individuals receiving property from the estate. Upon death, the taxes imposed provide incentive to transfer assets before death.

Facts about Capital Gains Taxes

The increases in value of anything (including investments or real estate) that makes it worth more than the purchase price are called capital gains. It is likely that the gain may not be realized or taxed until the asset is sold.

Normally, capital gains are taxed at a lower rate than regular income to promote business or entrepreneurship during good and bad economic times.

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