Every citizen of this country has to pay taxes to the government to contribute to the growth of our country. Have you paid your taxes on time? If not, IRS can take action against you. In this blog, we will focus on the history of the tax system in our country. Read the full write-up carefully to learn more about them. If you don’t know much about tax laws, you can consult an expert.
According to tax experts (like an IRS tax lawyer in California), taxation is necessary for any country. If the country wants to provide some basic facilities to their citizens, it must collect taxes and spend the money making roads, hospitals, schools and many other community items. Here, we will talk about the pre-tax era and the evolution of taxes throughout the years.
What About The Pre-Tax Era?
Earlier, our country had no taxation because we had no government to collect those taxes. Although British people imposed some taxes on us, it was inconsistent and didn’t count as taxation.
Once the revolutionary war ended, the state started imposing taxes using power given by the Constitution. In the initial days, there were only excise taxes. Through time, different taxes add up.
Introduction of Income Tax
Civil war indirectly created the country’s first income tax. The Internal Revenue System was formed and started collecting taxes. Although initially, individual states used to collect taxes, IRS took over the charges and the responsibilities of collecting taxes. The rule is simple if you have earned, you need to pay a portion of it to the state.
Different Taxes Present In Our Country
Apart from income tax, do you know the different types of taxes available in the country? Let’s discuss some of the popular ones here-
- In the year 1797, the first estate tax was started by the US Navy. During all this time, this particular tax has gone through several changes.
- In the year 1924, the Gift tax started. According to the law, if you have received an expensive gift from anyone, you must pay some taxes.
- Sales tax is hugely popular in our country. It was first invented in 1921 in a few states like West Virginia, Alaska etc. Later, it became accepted by the whole country.
Our country has many more taxes; we have discussed a few of them here. You can consult with an expert to learn more about them.
Change In Tax Rates
The tax rate has changed many times in the history of taxation. Initially, it was like 1% of your income. Right now, there are tax slab systems in our country. Depending on your income, an individual's tax rate could vary from ten to twenty-four per cent. You should contact a tax professional (like orange county tax attorneys) who can help you find your tax bracket and prepare your tax papers.
Things You Need To Remember While Filing Taxes
When you file your taxes, keep these things in mind.
- IRS has all the information about your financial status, don’t try to outsmart them by mentioning false income.
- If you don’t pay your taxes on time, IRS has the authority and power to take action against you.
Don’t forget to consult an expert if you know little about taxation in your country.
