What is Tax - 5 Facts About Tax - News Interns: Economic , International , Ranking, Pakistan News


Saturday, August 10, 2019

What is Tax - 5 Facts About Tax

5 Facts about Tax

What is Tax - 5 Facts About Tax
Source: "Taxes" by Mike Cohen - Under Creative Commons License

It has been said that
“Two things are certain, first Death and second Tax.”
Well, Tax is an ultimate way in which a country collects revenues against providing facilities i.e. Health, Education, Peace, Infrastructure and Communication to its people.

By the end of this article, you’ll come to know “5 Things which you should know about tax.”

5) Tax is the Earning of your Country:

  • Payment of taxes is always been a frustrated one like normally it is considered as “Why do I pay tax?” or “Why to share my earning with Govt?”

  • Well, do you know that taxes are actually a way your Govt earns through you? Did you noticed that when you buy something in the Price Tag Sales Tax is mentioned along with Product’s Price, well it’s the way your Country charging you and which indirectly are your country’s earning. However, you’re not only paying Sales Tax. There are about more than 15 different types of taxes you are paying against the services you are getting.

  • As per Economists, the only way of bearing a country’s expenses is through taxing the economy. By taxing people govt use to fulfill the country’s heavy billion-dollar Bills, Paychecks to Judges, Buying Tanks, and even Building Roads.

 After years of experience and researches, modern countries of today’s world came to the conclusion that taxing the economy is the only best way to run an administration in the long term. 

Otherwise through choosing other options rather than Taxing the economy a country someday could get into trouble. So, this is the fifth fact of 5 facts about Tax.

 4) Tax prevent Illegal Activities:

  • Well, it seems odd but it isn’t. Let me clear this point by using some words, “When there is invigilator in the examination hall the chances of cheating among students are quite less.” 

Same for this case, many conducted piece of researches has shown that more illegal activities occur in the places where there is no rule of law, taxation, and no merit. Well, that doesn’t mean the countries with taxes have no illegal activity, of course, they could be. Rather, the point is through imposing taxes people usually get documented and came under the radar of the State

Administration of a country knows its people’s jobs, whom they work for, what are their incomes and how they could affect the economy as a whole which indirectly gives data to the State to enhance the system and control the illegal activities. So, this is the fourth fact of 5 facts about Tax.

What is Tax - 5 Facts About Tax
Source: "Money" by Maciej - Under Creative Commons License

3) Tax facilitate Poor more & charge more from Rich:

Even Sweden (home to 2/5th Global Millionaires) are paying 70% upon their earnings more than a fixed digit as Income Tax.

One of the targets of charging such high taxes from the elite class is basically to make living easier for the public, especially poor people. 
Governments use to spend taxes on the health sector, education, law & reinforcement and many many more. Which indirectly strengthen the economy and make the country stronger. This is the third fact of 5 facts about Tax.

5 Facts about Tax, Industries

2) Tax is the Facilities:

  • In another sense, the facilities you are getting from your Country depends upon the level of taxes you’re giving them.

 The more facilities mean more taxes and fewer means for less. Moreover, the independence of your country as a whole also depends upon you. So, grasp the idea that you’re important for your country.
De-facto we said earlier, in U.S tax brackets are ranging for 10% tax against income of $0-$9525 to 37% against $0.5-9 Million and then 70% (for $10 Million to onward) as per new laws*. 

Q: Why people are paying such huge taxes? 
Answer: People are paying such huge taxes because they are receiving excellent public facilities in the result as well. So, taxes are ultimately the level of facilities you’re going to get later.

So its all about our second fact of "5 facts about Tax".

What is Tax - 5 Facts About Tax, Flat world map

1) Tax means Development:

As we said earlier, 

  • Taxes are utilized in the Infrastructure of a country. They are exercised in the development sector as well. Roads, Bridges, Telecom Services, Universities, and Justice Courts all are built through using taxes paid by you and me. 

Q: Why Developed Countries imposing more taxes than Developing Countries (Because developing countries need more funds to be funded for development not developed ones)? 
Answer: Well this is a quite valid and good question. Reason Developed Countries like the U.S, China, Germany, Sweden, and the U.K are charging higher taxes because they have more expenditures than developing countries and they also have a quite larger amount of high earning and rich people as public. 

Whereas on the other hand developing countries should have to tackle two things at the same time 
1) To tax the economy for getting earnings. 
2) Encourage the industrial sector for more output by taxing them less. 

Here the question arises 
What should be the Tax policy of a developing country? 

In its answer, we must say it's a topic of "Big Debate". However, Team NewsInterns will soon argue with its words on this “Big-debatable” topic as well.


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