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Accounting Allah shmoop tax logic Boy Does this ever sound

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like an oxymoron Right Well government officials presumably try to

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be fair in the way they allocate burden to society

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The tax system we have today evolved over very long

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periods of time and is ludicrously complex So why tax

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something only a government could think up You work hard

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all day for your boss And then at the end

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of the week the government grabs a hefty portion of

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your paycheck for taxes If you're the one doing all

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the work how come Uncle Sam takes such a huge

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chunk of your wages And why is it that the

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harder you work in the more money you earn the

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higher a percentage of those incremental wages Uncle Sam takes

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Well as it turns out you're not the only one

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with bills to pay In fact the U S has

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had bills for well as long as it's been around

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From the moment that we became a country in a

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seventeen seventy six or at least declared that we were

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one there was a country to build wars tow wage

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bridges to build and you know guns to by O

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and politicians have always wanted to live in a nice

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big house on the hill and you know those don't

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come cheap Well before the nineteen hundred's the government paid

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for itself by charging ad hoc taxes And you know

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all those hawks really add up Well that just means

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that every time you bought stuff regardless of how much

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money you earned attacks was charged and that money went

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to the government there were no personal income taxes So

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whether you were earning a couple hundred dollars or tens

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of thousands of dollars a year this was the eighteen

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hundreds Maybe when wages were low and things didn't cost

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much Well you got to keep all of it All

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your personal income No personal income tax Wow Then came

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tax reform Yeah the idea was basically that rich people

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got more benefit out of more organized government So folks

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thought that the rich should be taxed at a higher

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rate than the poor In any case there was definitely

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a need for an organized government since without it there

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was no way to raise an army pay debts or

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conduct business with other countries Then in nineteen thirteen the

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sixteenth Amendment was passed and Since then individual incomes have

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been taxed with amore Quote progressive on quote tax system

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Translation People who work harder and earn more money are

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taxed at a higher rate Yeah taxes air Ah highly

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loaded politically charged concept and note how the wording comes

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from lawmakers Progressive is good Sounding regressive is bad sounding

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In fact progressive tax attacks the higher wage earners at

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a higher rate than the lower wage earners And when

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everyone pays the same tax on a given product say

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as in the case of a gallon of gasoline that's

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regressive tax It's like bad that everyone pays the same

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amount And how does the government collect Well three letters

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I r S the three letter acronym that prompts many

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four letter words Taxing Americans was only the start though

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while passing the tax law was fairly simple getting people

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to pay taxes and deciding who would pay what was

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way more complicated It's not as though people were gonna

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line up the hand over part of their wages So

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the government created the I R s Internal Revenue Service

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possibly the most hated government agency in existence Although uh

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well it gets a run for its money from the

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D M V Why do people hate the IRS so

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much Well it's official role is to generate revenues for

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the U S Government so the IRS makes sure that

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tax laws are enforced And for many people the IRS

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represents a tax system that deprives them of a big

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chunk of their paycheck and not much else On top

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of that the IRS can launch audits like when some

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guy in a suit shows up at your company or

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house and go through all your receipts to see if

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you're cheating the system Pro tip Don't cheat the system

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This is how they catch mob bosses and money launderers

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You do not wanna mess with the I R s

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It usually results in a lot of sleepless nights bitten

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fingernails and interesting four letter words from everyone including your

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parents So what gets taxed in the U S Well

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just about everything Most things that you buy use or

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cr tax in some way or another Like your house

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or apartment Your gas your jewelry your makeup your clothes

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your game system your phone your dog your dinner your

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death the tiny adorable blankie your grandma bought when you

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were a baby You know your toothpaste tax your paycheck

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tax Should we keep going No matter how hard you

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try we're talking off the grid in the middle of

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Montana Try Chances are you're going to be paying taxes

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one way or another Whether you agree that the government

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needs to raise money somehow to pay it's ludicrous bills

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or whether you grumble every April as you pay up

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well taxes are impossible to void and it's illegal even

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try The very fact that you have to pay taxes

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at all might seem unfair After all you worked really

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hard all week So why should the government get any

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of the money Let them find their own work Are

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we right Well even if we admit that the government

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has to raise money for health care schools and other

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good stuff But there's really no way for Uncle Sam

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to Goto work Those pinstriped pants would never let him

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get passed The interview stage There's a lot about taxes

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that might make you question him Say your dad works

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as a construction worker for sixty hours a week so

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that you can have a nice house food new skinny

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jeans and a shot of college He works hard so

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that you have a good life but he pays far

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more in taxes than your neighbor The blast loud music

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on Saturday mornings and work less than twenty hours a

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week and it gets a lot of government handouts Well

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why does your dad have to A more especially since

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he's working so hard he earns more But that's because

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he's trying to provide a better life for you Why

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should he be penalized for that Shouldn't he be paying

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less in taxes because he's working hard and raising you

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And what about hamburgers Well they don't seem like a

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big tax issue But let's say you love the idea

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of a big juicy see hamburger and you work hard

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to resist the lure because well you want to stay

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healthy but your best friend happily gives into temptation Every

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day you wait one hundred seventy pounds and your best

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friend ways to ninety and you're both the same height

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in twenty years Your B F F is likely going

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to get diabetes and or some other very ex offensive

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to treat health issue The average expected cost of health

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care then might be a three grand for you but

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thirty grand for your friend Is it fair that you

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pay the same taxes for healthcare essentially to government than

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covers your healthcare bills even though you resist when your

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stomach is demanding fries and your friend does not Is

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that fair Well there's only so much money to go

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around even with the government digging deep into your wallet

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through taxes If the government keeps creating social programs to

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give away taxpayer money well taxes are going to keep

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going up and up and up Does it make sense

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to charge more and more for those programs when not

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everyone benefits from him Or is it better to cool

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the spending in and have lower taxes Well if you

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read I'm ran you know the basic idea against raising

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taxes That story goes something like this When you tax

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those who work the hardest no one wants to work

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the hardest They see others enjoying life while doing less

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Eventually workers slow down and people have less cash which

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means they spend less which means that less stuff is

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made because they're less need for it Jobs were then

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lost and the economy slows down and we become a

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Second World country Well pretty soon we're sitting around in

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the dark eating last year's can of beans and wondering

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why we aren't working in an office anymore Okay well

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that might be a bit dire but it's true that

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high taxes can be discouraging Would you start a business

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if you knew that you'd have to pay so much

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in taxes that your business had a good chance of

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failing Even if you put one hundred percent effort in

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would you Study is hard if everyone in class got

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the same grade no matter how much they studied well

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on the other side of the coin there are plenty

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of folks who feel that keeping tax rates low isn't

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the answer to anything either Who in the world would

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want higher taxes Well nobody really Other than maybe people

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who don't work or don't earn much money because they

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don't really care They're not gonna pay any more taxes

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But there are people who want to Seymour government programs

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in place and are willing to put up with higher

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taxes to get him for example some people want universal

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health care paid for by the government They point out

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that the unexpected medical expenses you know the type you

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get after tripping over your own shoe lace and making

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your head are the leading cause of bankruptcy in the

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country Yeah well they say that raising taxes and providing

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health care for everybody would help everyone who stays at

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home when what they really need is a hospital What

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would you do if you didn't have to pay thousands

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of dollars for health care What would you study if

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you could get a college degree for free ish Well

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you could claim that it everyone paid slightly higher taxes

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and more people got a college education The country might

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have better educated workers who are better able to create

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new jobs So which side wins Well should the rich

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be taxed Mohr because they can afford it in quotes

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Or did they work hard enough for their money And

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they should be just left alone Taxed at the same

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rate Is everyone else It's really unlikely if it will

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ever see an end to the squabble The debate continues

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and no answers inside anytime soon So you know good 00:08:53.377 --> [endTime] luck with that

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