Photo by: Nataliya Vaitkevich
Every master was once a beginner, and every person was once ignorant. If you are familiar with the Latin phrase “ignorantia juris non excusat,” which means “ignorance of the law excuses not,” then you would know how crucial it is to become educated or knowledgeable in important matters to ensure that people are well-informed. That is why this blog is here to teach the basics of taxes.
It is better to be equipped with more knowledge than necessary than to know nothing at all. In Gary Williamson’s book titled Thoughts of an American Taxpayer, he sheds light on matters related to tax that people should know more about, as, after all, it is the American’s hard-earned money.
By definition, tax refers to the mandatory payment or charge that is collected by the local, state, and national governments from individuals or businesses in order to cover the costs of general government services, goods, and/or even activities.
Why do people need to pay taxes? For a long time now, around the world, taxes have been a staple of governance and are a source of a government’s means to be able to provide goods and/or services to its people, especially for those who may not have access to them in other ways.
The government does not sell products or have profits of its own; that is why its only way to fund its services is by asking the citizens to pay taxes from the money that people earn through buying items or owning properties. With that said, it’s time to learn the basics of taxes:
In the United States, there is a tax code written by Congress, that governs the collection of taxes, which is enforced by federal tax rules, including who can receive tax credits, rebates, and refunds. The IRS, which stands for Internal Revenue Service, is a government agency in the United States Department of Treasury that carries out all these functions. With that said, let’s jump right into an overview of the federal tax system in a way that everyone can understand.
The United States Federal Income Tax is applied by the Internal Revenue Service (IRS) on the annual earnings of every individual, company, and other legal entity. A Federal Income Tax is applied to all forms of earnings that can make up a taxpayer’s taxable income, which includes bonuses, commissions, investment income/s, salaries, tips, and more. So what are considered Federal Taxes?
- Capital Gains Tax
- Estate tax
- Excise taxes on cigarettes, fuel, and other items
- Gift tax
- Medicare tax
- Self-employment tax
- Social Security tax
For the assessment and collection of all of these federal taxes, it is the Internal Revenue Service who oversees the process. In Williamson’s book Thoughts of an American Taxpayer, he stated something that everyone should keep in mind: “If we do away with the federal income tax system, we would be able to utilize our tax dollars on a state-by-state basis. The federal government can collect a federal sales tax to pay for our national defense, border protection, and other federal government programs.”
When it comes to the government, it is important to check whether or not they are doing their job right for the benefit of every citizen. In Thoughts of an American Taxpayer, Williamson says, “There is no oversight, transparency, responsibility, or accountability of the people making the decisions on where the money is going or for what. We need to face the fact that the government is very wasteful at all levels, and the only taxes we should be sending them are for national security, defense, border patrol, and other national projects to benefit all Americans, not their own agendas and pet projects. Along this same line, everyone should be part of the tax process and pay their equal share. No American should get a free ride.”
Such a statement could not be truer, as it is a reminder that the government should be held accountable at all times for doing its job, which is to serve the people and adhere to what is best for everyone. Get a copy of Thoughts of an American Taxpayer by Gary Williamson, available in paperback, hardcover, and eBook on Amazon, Barnes & Noble, and ReadersMagnet Bookstore.
