How to Be a Philosopher: or How to Be Almost Certain that Almost Nothing is Certain
“Nothing is certain in life but death and taxes”
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Transcript of “Nothing is certain in life but death and taxes”
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“NOTHING IS CERTAIN IN LIFE BUT DEATH AND
TAXES”
Economics
Ms. Whitlow
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HISTORY
Tax withholding first occurred in 1862 under Abraham Lincoln for the purpose of helping to finance the Civil War. The federal government also implemented a plethora of excise taxes for the same purpose. But in 1872, not only was tax withholding abolished, but the income tax was repealed entirely.
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HISTORYAfter the ratification of the 16th Amendment in 1913, the income tax became permanent. The amendment was facilitated by the need to pay for World War I
After the Social Security Act passed in 1935, Social Security taxes were withheld by employers. This change paved the way for income taxes to be withheld again starting in 1943 with Congress' approval of the Current Tax Payment Act.
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HISTORY
In the early days of the income tax, when there was no withholding, people paid their full income tax bills for the previous year once a year on March 15, or in quarterly installments. Under today's tax withholding system, taxes are collected at the source. This means that wage earners never see the money that they owe in taxes - it's taken by their employers out of their paychecks and transmitted directly to the federal government.
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TODAY
90% of the tax ultimately due in April being withheld from the employee's paychecks throughout the year. If less than 90% is withheld, taxpayers are subject to penalties and fines. Under the current withholding system, each April, people either pay the remainder of what they owe, or, if too much tax has been withheld, get a refund. Social Security and Medicare taxes are also withheld from every paycheck.
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ARE TAXES FAIR?
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ABILITY TO PAY VS. BENEFITS RECEIVED
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WHY DO WE PAY TAXES?
“Taxes are what we pay for civilized society.”
– Oliver Wendell Holmes, Jr., 1904
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STATE/LOCAL TAXES
Local Roads
Schools
Hospitals/Clinics
Police/Fire
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FEDERAL TAXES
Defense
Student financial aid
Social Services
Highways
Education
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REGRESSIVE TAXES
Everyone Pays the same FIXED amount…
Examples: User Fees, Sales tax, gas tax
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PROGRESSIVE TAXES
The HIGHER income= the HIGHER taxes
$0-8,500 10%
$8,501-34,500 15%
$34,501-83,600 25%
$83,601-174,400 28%
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PROPORTIONAL TAX
Property taxes=Value of Property=Mil rate in Gwinnett 19%
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PROPORTIONAL TAXES
Social Security/FICA = 6.2%
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EVERYONE PAYS
The income tax law is a lot of bunk. The government can’t collect legal taxes from illegal money. -Al Capone