It's something only a government could think up: you work hard all day for your boss and then, at the end of the week, the government grabs a hefty portion of your paycheck for taxes. If you're the one doing all the work, how come Uncle Sam can take a big chunk of your wages?
Well, as it turns out, you're not the only one with bills to pay.
Taxes: Back Then
In fact, the United States has had bills for as long as it's been around. From the moment that we became a country back in 1776, there was a country to build, wars to wage, bridges to build, and guns to buy. Oh, and politicians have always wanted to live in a nice big house on the hill—and those don't come cheap.
Before the 1900s, the government paid for itself by charging ad hoc taxes. That just means that every time you bought stuff, a tax was charged and that money went to the government. There were no personal income taxes, so whether you were earning a couple hundred dollars or tens of thousands of dollars (this was the 1800s, when wages were low and things didn't cost much), you got to keep all of it.
Then came tax reforms.
The idea was basically that rich people got more benefit out of a more organized government so folks thought that the rich should be taxed more to pay for it. In any case, there was definitely a need for an organized government, since without it, there was no way to raise an army, pay debts, or conduct business with other countries.
Then, in 1913, the 16th amendment was passed: since then, individual incomes have been taxed with a more progressive tax system. Translation: wealthier people are taxed more.
Taxing Americans was only the start, though. While passing the tax law was fairly simple, getting people to pay taxes and deciding who would pay what was way more complicated. It's not as though people were going to line up to hand over part of their wages. So the government created Internal Revenue Service (IRS), possibly the most hated government agency in existence (although it gets a run for its money from the DMV).
Why do people hate the IRS so much? Well, its official role is to generate revenues for the government, so the IRS makes sure that tax laws are enforced. For many people, the IRS represents a tax system that deprives them of a big chunk of their paycheck. On top of that, the IRS can launch audits, when some guy in a suit shows up at your company or house and goes through all your receipts to see if you're cheating the system. (Pro tip: don't cheat the system.) It usually results in a lot of sleepless nights, bitten fingernails, and interesting four-letter words from your parents.
What Gets Taxed
So what's taxed in the United States?
Most things that you buy, use, or see are taxed in some way or another:
- Your house or apartment
- Your gas
- Your jewelry
- Your makeup
- Your clothes
- Your game system
- Your phone
- Your dog
- Your dinner
- Your death
- The tiny, adorable blankie your grandma bought when you were a baby
- Your toothpaste
- Your paycheck
Should we keep going?
No matter how hard you try—we're talking off-the-grid-in-the-middle-of-Montana try—chances are you're going to be paying taxes one way or another. Whether you agree that the government needs to raise money somehow to pay its bills or whether you grumble every April as you pay up, taxes are impossible to avoid.
And it's illegal to try.