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Posted by : Daniel Stoica in (Blog, Tax Topic) On: July 19th, 2011
The Four “R’s” of Why We Pay Taxes
Tagged Under : accounting professional, America, constituents, Daniel Stoica, food stamps, government, Medicaid, public assistance, re-pricing, recession, redistribution, representation, revenue, spending, tax dollars, tax professional, taxes, taxpayers, United States
Many Americans often ask why we are subjected to taxation. The answer is fairly simple, if you reference the four “R’s”.
Revenue
The United States is run and funded by our taxes. Without them, our government could not function and we would have a hard time for paying for things like transportation, education, and several benefits we now have at our disposal. All branches of our government would cease to operate. Obviously, there is always debate about whether or not those tax revnues are used wisely; however, the fact is that taxes do pay for essential functions.
Re-pricing
Many of us may not know that our tax dollars are being used to re-price many of the everyday services we use. The government is attempting to subsidize specific products and services, which they feel merit the re-pricing. When our government decides to re-price farm crops by making up the difference between the market value and what they feel the farmers should make on the crops, the government will subsidize the farmer by making payments to him. This is how re-pricing works.
Redistribution
Taxes are also used to redistribute wealth across the country. Some taxpayers do not like this because they feel the government is taking from the rich to pay the poor. Higher percentages of taxation are often applied to the wealthy, and this money is used to pay for services such as Medicaid, food stamps and public assistance. However, all taxpayers contribute to these programs. This is how redistribution works.
Representation
It is an elected official’s responsibility to put the needs of his or her constituents first. Their job is to represent the people of the state. It is also their job to distribute tax dollars fairly. The people have the right to oppose wasteful or unnecessary spending and taxes. If we were unable to do this, it would be called “taxation without representation”. Some people feel that we are in the midst of that issue today because it seems as if we are taxed no matter how much we oppose it. Despite this feeling of being unfairly taxed, we, as Americans, are still represented by our elected officials.
