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´╗┐The Brief Basics of Taxes

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A tax is an enforced contribution that helps to pay for various government services such as roads, schools or public health care and utilities. Taxes are levied by government entities and come in various forms, most commonly via direct and indirect taxation. Direct taxation can be most easily defined as taxes paid straight to the government by way of yearly income tax returns. Indirect taxation comes from the purchase of goods in retail venues. While there are rates for taxation set on federal levels, states and counties can also set their own taxation rates to help pay for various public works.

The first historical reference to a system of taxation dates back to the ancient Egyptians. As money was not widely in use, goods and livestock were often the sole means of contribution. Individuals often gave according to their line of work and those who could not or did not contribute enough were penalized. References to taxation are also found throughout Europe's history where taxes were imposed on everything from windows to a man's beard. In times of war, it was common for taxes to spike significantly to afford the expenses of arming soldiers and ensuring victory. These times could be a heavy burden on the average citizen.

Although there are other methods, taxes are commonly applied in the form of percentages. These percentages can vary depending on the entity that sets them. When attached to the purchase of goods, individuals pay the tax immediately with the price of the item. The retailer then regularly calculates these taxes from sales, on both state and federal levels, and pays them to appropriate office of revenue. When it comes to real estate and other property, taxes are paid annually. Retailers and individuals who do not pay the correct amount of tax owed on goods or real estate can face stiff fines and possible imprisonment.

Taxes have been a large part of history and there is hardly a country on the globe that does not have some point of contention with their current system. As will happen where ever money is an issue, citizens constantly express concern of whether a tax is too high or if the money collected is spent appropriately. In fact, it was the taxation of tea that lit the fuse to American independence. Almost a part of tradition, taxation has remained at the top of the list when it comes to hot button issues for politicians. Whether one disagrees with their tax system or not, a great number of things that citizens depend on everyday would not be possible were it not for an intricately structured tax system.



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