Why Do People Pay Taxes?

If you haven’t read our post on ‘Is Taxation Legal‘ you should start there first!

Despite the grumbling we hear from many people about having to pay heavy taxes, people do pay taxes. At least a clear majority of them do pay taxes. So, if you don’t like to pay taxes why do you pay? Or why does everyone pay taxes?

The straightforward answer to this is that the rules say that you must pay the taxes and hence you pay it. Many of you may not see or know where this money goes. But the money does go to certain good purposes.

Let us first understand what are the different taxes that we pay.

Types Of Taxes

There are basically three types of taxes that you pay. The Federal Tax, State Tax, and the Local Tax.

The Federal taxes include the income tax, payroll tax and Corporate tax mainly. Others include the excise taxes, tariffs, and estate taxes.

The state taxes come form payment to hospitals, universities, and tolls. State also receives a part of its revenue from the Federal government.

Local taxes are collected from schools, cities, and counties. They also get a share of their revenue from the states.

What Are Taxes Used For?

You may not hear about how your taxes are being used, but you see them and use facilities that are paid from the tax collected from you.

You pay taxes in many ways like taxes on your income, tax you pay when you purchase things and tax you pay when you sell an estate. All these taxes are used for giving you many facilities. A major portion of this tax goes for payment of government employees who do a lot of functions that help you.

The money also goes for maintaining the police force and the firefighters. This money also goes to pay for the judges and other employees. Your money is also used to ensure that the roads you travel on are in good condition and safe for your travel. Another way in which your money is used is for the construction and maintenance of public parks and libraries.

The government also undertakes many programs for those in the society who are less fortunate than you. Medicaid is given from the money you pay as taxes. It helps people having a low income also get medical aid and preventive treatments.

The tax you pay also helps in paying for social security for the seniors. The money also goes for spending on defense expenditure. Your tax money doesn’t go waste. They are used for many good purposes.

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