What is the purpose of income taxes?
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Q:

What is the purpose of income taxes?

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Quick Answer

The first income tax in the United States was implemented in 1861 to help the federal government cover the costs of the Civil War, according to the Library of Congress. This tax was repealed 10 years later, and after several variations was eventually replaced by the 16th Amendment to the U.S. Constitution, which allowed the government to collect an income tax as a source of federal revenue.

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Full Answer

The 16th Amendment was ratified in 1913. Since then, federal income taxes have come to be seen as an indispensable part of what Oliver Wendell Holmes described as the price paid "for a civilized society," according to the U.S. Department of the Treasury. The framers of the Constitution enumerated the government's obligation to provide for the common defense and promote the general welfare. Taxes on income are the method by which the government collects the revenue necessary to execute these functions.

Another useful function of public taxation, according to the Treasury, is in educating the public about the real cost of the government's services. Knowing how much a certain policy will cost before it's implemented encourages lively debate and the rational cost-benefit arguments that are central to policy decisions undertaken by the citizens of a republic. A policy of general taxation thus encourages a broad public understanding of what the government does and how it operates, information vital to voters.

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Related Questions

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    Who has to file income taxes?

    A:

    According to Kelly Phillips for Forbes, several factors impact the necessity of filing income taxes: dependent status, age and income. These factors and thresholds change as often as once per year and may be different between the state and the federal government. Phillips suggests consulting a tax professional for advice.

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    How do you take itemized deductions on income taxes?

    A:

    Taxpayers can itemize deductions using Schedule A on Form 1040, according to the Internal Revenue Service. Common itemized deductions include mortgage interest, state and local property taxes, charitable contributions and medical and dental expenses. Itemized deductions can only be taken instead of, not in addition to, the standard deduction.

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  • Q:

    Which states have high income taxes?

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    States with the highest income tax rates as of tax year 2014 were California, Hawaii, Oregon, Minnesota and Iowa, reports Intuit. Other states and districts that complete the top 10 list of states with the highest income tax include New Jersey, Vermont, the District of Columbia, New York and Maine.

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  • Q:

    Where do you mail your state income taxes?

    A:

    State income taxes are payable to each individual state; for example, Ohio residents make income tax payments to the Ohio Department of Taxation, while Virginia residents make their state income taxes payable to the Virginia Department of Taxation, according to the Virginia Department of Taxation's website. Different states have different state-level tax agencies to handle personal and business state tax payments. These taxes differ from federal taxes.

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