Taxes originally came about to help raise money to run the U.S., state, and local governments on behalf of its citizens. You practically need a degree in tax law in order to understand the convoluted codes and structures that have arisen to support the system, however.
Taxes aren’t just used to fund the government. They can be used to encourage some behaviors and punish others. They reward loyalty, especially with regard to fundraising and shift the economic performance of financial systems.
The tax laws that derive from these processes are complex and experts are required to keep them going.
History of revolt in the United States over taxation
The United States began over a revolt around taxes when immigrants to the American colonies disagreed with British taxation. In modern times, tax law changes included Proposition 13, income taxes and even the tax reform of 2018.
While some agree with the U.S. tax reform, others say that it is all a political game. The savings many people will obtain on their U.S. income taxes may be reduced by other initiatives at the state and local government level.
For example, the governor of Washington wants to institute a carbon tax to encourage reduction in the use of fossil fuels.
State governments offer incentives and disincentives
Washington state and other states in the union are hoping to land a new project announced by Boeing for a middle market jetliner. Amazon, a Seattle based company is hoping to expand in 2018 to a new headquarters.
States vying for both projects will offer tax incentives to encourage these companies to choose to locate the new facilities in their jurisdiction.
In a different type of effort, Seattle recently instituted a tax on soda in order to discourage people from purchasing the sugary drink. Sounds like an excellent source of tax revenue until you realize that nearby cities can promote the availability of “tax free” soda.
More recent political efforts in Seattle include an initiative to ban the income tax altogether.
What all this boils down to is that taxes appear to be here to stay in one form or another. The rules governing taxes grow continually more complex.
It is no wonder some people end up making mistakes on their tax filings and getting into hot water with authorities. If you need help with a tax issue, are receiving notices from the IRS or find yourself being audited you may wish to consult an attorney who focuses on tax law.