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Why Taxes Are More Crucial Than People Think

why-taxes-are-more-crucial-than-people-think

Money is transferred by exchanging currency with labor or goods in the market. If there’s an error with this process, money circulation will slow down and potentially crash. Now, there has been plenty of problems caused by minor trouble in the flow of currency.

After being handed to another seller, the currency will transform once again to another labor or goods. There is no limit on how money is used or earned in society except for the law prohibiting it. In summary, the coin will always fly around the market and the people.

But, the people must redirect some of their money to the authority. The experts have coined the term for this process as taxation. Moreover, there have been debates and arguments arguing the best taxes and how to execute it.

“Taxes are the dues that we pay for the privileges of membership in an organized society.”

— Franklin D. Roosevelt

The Three Holy Types of Taxes

why-taxes-are-more-crucial-than-people-think

There are three types of taxation categorized by how it is deduced from the people: progressive, regressive, and proportional. As its name implies, progressive taxation makes wealthier people receive more tariffs than poorer ones. For example, owning a jet will get someone a luxury goods tax.

On the other hand, regressive taxation impacts everyone no matter what is their income or social status. Experts have discussed that this type of tariff might put more weight on lesser people. As an illustration, a person who makes minimum wage still pays the same amount for a driving license as the millionaires.

Proportional taxation is between regressive and progressive. So, people must pay a flat-amount percentage of their wealth. By far, this type is the most radical and unaccepted idea of charge or fee from an economic perspective.

How Taxes Influenced History Around the Globe

why-taxes-are-more-crucial-than-people-think

The earliest civilization and writing in the world is from Ancient Mesopotamia. Moreover, there is a ton of reference where its people paid taxes to the king with livestock and farm products. There is also mention of taxation in almost every old religious scripture around the globe.

In the middle of the 18th century, Great Britain fought and won the seven-year war against France. They received a massive amount of debt because of the war’s loss and casualty. Therefore, Britain employed heavy taxation for its colonies that culminated in the Declaration of Independence of the USA.

More recently, the British levied a massive tariff for salts to the Indian People in the 1930s. This action resulted in a peaceful protest by walking to the Arabian Peninsula to scoop salt led by Mahatma Gandhi. Then, the international media reported the events that sparked support for India’s independence.

“Earth provides enough to satisfy every man's needs, but not every man's greed.”

— Mahatma Gandhi

The Seemingly Good Utilization of Taxes

why-taxes-are-more-crucial-than-people-think

Commonly, the government uses taxes to fund an institution or a program that the people won’t pay in the first place. Military, road building, and research funding are some of the many examples of that statement. Without taxation, the crucial notions might be abandoned by the majority.

Taxes are also a tool for redistributing wealth in a civilized society. The wealthier person might be deduced to pay more money since they have a more extensive bank account at their disposal. Likewise, less unfortunate people may still enjoy their lives without expensive luxuries.

Yet, the government may become prone to make an unwise choice regarding people’s funding. For example, the NSA spied on American people by phone using the money that the institution acquired from its people. The government received massive backlash from the news and concerned people concerning their safety.

The Explanation of Why Taxes Is of the Utmost Importance

why-taxes-are-more-crucial-than-people-think

Governments have debated among themselves about which type of taxes is more beneficial. Moreover, people won’t accept everything deemed superficial against their understanding and interest. So, governments are afraid to adjust taxes to suit their appeal because of the people.

Furthermore, taxes have directed many pointless or influential events throughout history. Most people won’t know that the comfortable condition they are living in today is the result of correct or incorrect uses of taxation. Hence, the next worldly crisis might stem from tariffs and taxes too.

Institutions also use taxes received from the government to achieve many goals. However, the trust of the people may be misdirected and used to hurt them. It is critical to observe and put money in the right hand.

© 2020 Azkra Fariyz Fadhilah

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