W. Marc Gilfillan, CPA, NC, individual and business CPA and Tax expert, shares about the history of taxes…

So the question remains, what happened with the tax system in the US?

US tax makers have been collecting what they have been sowing for quite a while. The honor system has been replaced by a system in which every tax payer is under surveillance due to the heavy threat of evasion. Basically, consent has been replaced with compulsion. Honor has been replaced with espionage. If you are feeling the pressure with today’s taxes, call a Cary NC CPA for all your tax-related needs!

In the 1950s, no bank told the IRS about customer affairs, interest rates went unreported, withdrawals of money were not reported, and not a thing that went through any account was photographed. Also, real estate transactions weren’t reported, stock transactions were not reported, dividends were not reported, income from other sources (Form 1099) wasn’t reported, and US Customs didn’t require a declaration of cash carried. Go here if you want help from a modern-day Tax Preparation in Cary, NC.

Before it was espionage, it was an honor system, and it functioned quite well. The erosion that happened over the previous fifty years to now is that everything of any fiscal significance is now reported.

Adam Smith stated that taxes will be evaded and tax laws shown little credence when there is a general suspicion of a lot of meaningless expense and great misapplication of the public revenue. In other words, $500 toliet seats, high-dollar grants to study the sex lives of ants, etc.

For the sake of catching a handful of tax resisters and evaders in the 1950s Congress made a tax abomination of the US tax system that more and more taxpayers attempt to evade. As a general rule, widespread tax evasion is a sure sign that a government’s tax system is bad. Citizens will pay taxes, even income taxes, if the rates are acceptable.

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