Q:

Why do people have to pay taxes?

A:

The three primary purposes of taxes are to fund the government, redistribute wealth and mitigate the negative effects of many consumer products. Without the taxation system, the government and most social services would not be able to function.

The primary function of taxes is to create a stream of revenue for the government. Almost of every aspect of the United States government is paid for by taxes, from politicians' salaries to the building of roads. Taxes allow the government to maintain an active military, fund public education, provide public services such as parks and libraries, finance scientific research and space exploration, enforce laws and build public landmarks. Taxes also serve to redistribute wealth from the rich to the poor. By charging higher taxes to those with higher income, the government ideally helps spread wealth to lower-income citizens. This type of redistribution can be seen in social services such as Medicare, which provides medical care to U.S. citizens age 65 and older, and the Supplemental Nutritional Assistance Program, which helps low-income families pay for food. Taxes are also intended to offset the harmful effects of many widely used consumer goods. Items such as gasoline and electronics exert a considerable negative impact on the environment, so these items are taxed in order to fund measures to combat their damaging effects.

Learn More

Related Questions

  • Q:

    How do you pay quarterly taxes?

    A:

    The Internal Revenue Service offers several options to pay quarterly estimated taxes, as of November 2014. Pay with your bank account, debit card, credit card, Electronic Federal Tax Payment System, electronic funds withdrawal, wire payment, check or money order.

    Full Answer >
    Filed Under:
  • Q:

    How much can you pay an employee under the table before claiming it on taxes?

    A:

    The Internal Revenue Service notes that for tax year 2014, an employee can be paid up to $1,900 in a calendar year before the employer and employee are responsible for paying taxes on the amount. After the $1,900 threshold is reached both employer and employee are responsible for taxes.

    Full Answer >
    Filed Under:
  • Q:

    How can you determine your IRS refund status?

    A:

    The refund status for taxes can be found on the Internal Revenue Service's website. Find and use the Where's My Refund? tool on the website.

    Full Answer >
    Filed Under:
  • Q:

    What is a tax payment plan?

    A:

    According to the IRS, a tax payment plan is a way for individuals to make payments on their taxes in monthly installments. As long as taxpayers pay the full amount owed, they can avoid or lower the amount of interest and penalties owed as well as the fees required to set up the payment plan.

    Full Answer >
    Filed Under:

Explore