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What Are Taxes?

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Taxes are a key issue in society since almost everybody has to pay them. So, what exactly is taxation?

Taxes are money that each person or business has to give to the government. The money is spent on roads, schools, transport, libraries, the military, and other things used by the public. Across the United States, there are hundreds, if not thousands, of different taxes. These charges can cover everything from your family’s income to your trip to the movie theater.

Taxes are collected by the Internal Revenue Service (IRS). It is a crime not to pay taxes, and people can be sent to prison or fined for refusing.

A Brief History of Taxation in America

After the American Revolution, the United States needed money to fund the government. The federal government imposed taxes on glass windows and other items. Different areas collected property taxes on land and buildings.

At the turn of the 20th century, a change in the tax code started. States introduced sales and inheritance taxes. In 1913, everything changed with the 16th Amendment and the introduction of income tax. This means that for the first time, the government could tax not just specific items like windows or property, but it could tax the money a person earns – no matter how that person makes the money.

The Tax System

Everyone has their own opinion on the tax system. Some people argue that taxes are needed to pay for public services like roads and schools – for example, some countries charge a lot of tax, but their citizens enjoy quality public services. Others suggest that taxes should be as low as possible so that each person can keep more of the money he or she earns. Some people even say there should be no tax at all! Where do you stand on the issue? High, low, or none at all?

Andrew Moran

Economics Correspondent at and Andrew has written extensively on economics, business, and political subjects for the last decade. He also writes about economics at Economic Collapse News and commodities at He is the author of “The War on Cash.” You can learn more at

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