One of the things that people generally frown at is taxes. If there is one thing that could generally affect your personal finance status that would be your taxes. If you do not want to get in trouble with the law, you need to pay your taxes.
The Reason for Taxation
At some point or another, you probably have muttered, “Why do we have to pay our taxes in the first place?” This is a complaint that mostly everyone shares. If you’d be asked, “Why does the government collect taxes?” What would you say?
Would your response be somewhere along the lines of taxes are the lifeblood of the government? It is true. The government has to collect taxes so that it can pay its debts or bills. The government will not be able to operate if it does not have the taxes to help with the cost of government operations.
Why not just print all the money they need?
They could do that, of course. Unfortunately, if the government prints out the money, this would cause high inflation. Now, inflation, as you must know, is a covert tax. Inflation would cause a huge blow to individual and personal finances. By printing money, the government would only be taxing people indirectly.
Direct taxation is better. The government needs to tax the people. Taxation in a way is the inexhaustible source of government revenue. It is also the process by which the government forces people to accept state currencies. Some people argue that this last reason is the ultimate reason for taxation.
Keep in mind that it is taxes that pays for fixing roads, provide social service, pays government workers, and provide other social amenities. The challenge for any government is the level of taxes to charge residents of the country.
