FREE ESSAY ON AMERICA TAX

AMERICA TAX

Running head: Taxes 
Taxes: Who benefits and who gets ripped off 
Taxes 2 
Abstract 
Taxes are the dollars that we pay to government to supply the services that are not or
can not be provided through the free enterprise system. Taxes have been around since the
beginning of organized societies. They come in various forms. Most common are income
taxes both federal and local government. These taxes are assessed on the amount of income
a person earns. Other taxes come in the form of user taxes; these taxes are imposed on
the people that are using the goods being taxed, such as gas tax, alcohol tax, sales tax,
and luxury taxes. Property taxes make up the major revenues for local and city
governments. Furthering the burden of taxation are taxes that are attached to such bills
as utility bills and rental expenses. 
Taxes 3 
Introduction Taxes; who benefits and who gets ripped off focuses mostly on Federal and
county taxes and not on state taxes. This report aims to give the reader some insight on
taxes: Why we have them, what types of benefits they supply, who benefits from them, and
who gets screwed by them. It informs the reader of the different types of taxation, where
the money comes from and where it goes. How can people avoid some tax increases? But most
of all, this report informs the reader that there is an incredible amount of money being
wasted by the federal government through overspending and irresponsible behavior of
government departments. This overspending has created a deficit that has caused billions
of dollars in damage to the credit of the country. As a result of these excess taxes, the
American taxpayer is getting ripped off by paying for waste in government. Most people in
this country are being ripped off in the amount of taxes they pay due to corruption
government and the flagrant overspending and waste of government departments. This over
spending and waste is the cause of high tax rates Why we have taxes Ever since the
beginning of organized societies, governments have been formed to rule over and to
protect the interests of these societies. In order for these governments to function
there was a need for revenue to meet the expenses incurred by these governments. This
need for revenue was met by levying taxes on individuals and businesses. It has always
been a question to the population being taxed as to whether or not the government was
doing a good job in assessing and managing the money it collected from taxes. 
Taxes 4 
The purpose of this report is to determine if the government is acting fairly in its
taxation of the American population, and to point out the waste in government spending.
In an article published November 1995, an unknown author explained the need for
government "revenue" by defending what the revenue supplies for the people. In America we
live within a free enterprise society. A free enterprise system is based on the idea of
competition is good and that only the most efficient businesses will survive. The free
enterprise system works with the idea that the consumer is somewhat knowledgeable about
the products they buy. However, in today's modern world the consumer cannot be always be
expected to make an informed decision about something. This is where federal laws are put
in place to protect the interest of the public. Examples of such laws are regulations
covering quality and safety of home construction, cars, and electrical appliances. The
economics of taxation, (p. 2) Such societies do not supply all the needs and services
that are required. Good examples of these types of services are national defense, and
local and state government. Other examples of services the government supplies are
managing our natural resources, including water supplies, construction and maintenance of
roads and bridges. Revenues pay for social programs such as social security, welfare,
medicare, and other government funded program that have been put in place with the idea
to help the public in time of need. Government grants for education, job retraining
programs, and small business loans are some other types of program that have been created
to help support the growth of the population. 
Taxes 5 
Education is another important service that is provided by local and federal governments.
The responsibility for primary education is on city and county governments. Secondary
education, such as colleges and universities, fall on the state government; however, the
federal government helps with primary, secondary, and vocational education by providing
grants that are an important part of the success of the educational system in this
country. Types of taxes Taxes have been around since the beginning of organized society.
They come in various forms. Most common are income taxes both federal and local. These
taxes are assessed on the amount of income a person earns. Other taxes come in the form
of user taxes. These taxes are imposed on the people that are using the goods being taxed
for example gas tax, alcohol tax, sales tax, and luxury taxes. Property taxes make up the
major revenues for local and city governments. Furthering the burden of taxation there
are taxes that are attached to such bills as utility bills and rental expenses. The
following information is an overview of what has been happening to tax revenues in city
and federal government. Property taxes for the most part have sky rocketed across the
country. Dearborn (1993) reported that, in the period from 1980 to 1990, local property
taxes increased nationally by an impressive 128%, with 32 states experiencing increases
over 100%. Property taxes make up as much as 92% of city or county revenue. School and
educational cost can take up as much as 97.5% of a county's revenue. 
Taxes 6 Out of 41 school districts surveyed, only 3 depended entirely on property taxes
as a local tax source. Between the period from 1984 to 1990, the city of Boston had the
highest increase in assessment ratio of property values of 158% and, while the city
reduced the tax rate by 51%, it still yielded a net increase of 56% more in tax revenues
from property taxes. 
Percentage change in local property tax revenue Percent change Percent change 1980-1990
1990-1991 RI 107.3% 9.4% MA 46.9% 6.4% NH 212.0% 16.7% VT 140.6% 11.3% CA 172.1% 8.9% NY
109.4% 8.0% NC 133.8% 7.6% 
Taxes 7 
In a recent report on property tax rip-offs, Razzi (1995) gave tips on how to reduce the
amount of property tax that a person pays. According to the National Taxpayers Union,
only 5% to 10% of homeowners appealed their assessments, but more than half of those who
do appeal receive some type of reduction in their assessment. Razzi stated that Dale
Cheema has saved $4,300 in five years by challenging the assessments on his California
home and rental properties. (p.4) Sales tax makes up for a big chunk of revenue in states
that are looking to place levies on users. Fortune magazine reported on the extremes of
state taxes. If you like to pay taxes, be sure to buy gas in Connecticut and cigarettes
in Michigan, and shop in Rhode Island or Mississippi. 
Taxes 8 
Where has all the money gone? 
The government, both federal and county collects from millions to billions of dollars
annually from taxpayers. The people who benefit the most are the people who get to
collect from government programs that give benefits to qualified individuals. Such
benefits could range from low income housing, college tuition grants, to tax exempt
investments for investors who invest in government approved projects normally associated
with other government aid to investors. The people who get ripped off are the people who
never get to collect from any government give-a-ways. The people who get ripped off are
the people who pay absurd amounts of taxes every year so that the government can support
these programs. The American government gives away billions of dollars to foreign
countries that have no means of repaying such depts. and the government does so without
ever asking the permission of the tax payers. After all the money belongs to the people
who are paying the taxes more than anyone else. In a report from the Committee on
Government Operations, the agency uncovered a multitude of fraud and waste in the federal
government. It blamed most of it on lack of leadership and mismanagement. The report,
(1993) stated, "the government's blind eye invited a savings and loan disaster that will
cost taxpayers $195 billion to $335 billion."(p.1). "By all signs, the record on
preventing government waste during the past 12 years is poor. The agency by agency
assessments contained in this report document waste totaling more that 300 billions and
billions of dollars more that can not be quantified due in large part to a lack of
commitment to sound and efficient management." (p.1). Taxes 9 Managing the federal
government, (1993) Reported the following: 
By using the results of investigations by this and other Committees, as well as by
auditors including the inspectors General and General accounting office this report
attempt to identify those programs in each of the major agencies that are suffering from
the worst miss management. It is the hope that this report will stimulate discussion
among policy makers and citizens on this important subject. Government waste has not only
bilked the taxpayer of hundreds of billions of dollars, but it has created a public
cynicism about government at a time when effective government is needed most. (p.2). 
The federal government has a department called The Office of Management and Budget (OMB).
Its duties are to foster strong leadership throughout government. However over the last
ten years the OMB has led the drive to deprive government of the resources needed to
manage big government. OMB has cut back on auditing and enforcement budgets, which has
led to huge rip-offs in government health care, defense, loan and other programs. In the
late 1980s, the Inspector General had filed complaints with the OMB concerning fraudulent
behavior in the HUD program. It was not until the scandal made the evening news that the
OMB investigated into the $2 billion dollar scandal caused by influence, peddling, and
greed. The following information was uncovered by the Committee of Government Operations
(1993): -  Ignoring early reports of significant failures the Defense Department spent $4
billion on a defense avionics package for the B-1 bomber that was eventually canceled. 
Taxes 10 
-  The Department of the Treasury awarded a contract for off the shelf, commercially
available equipment and services to a vendor whose price was half a billion dollars
higher than the runner up. -  The Pentagon awarded a contract for its Reserve Component
Automation System to a contractor whose $1.6 billion bid was hundreds of millions of
dollars higher than other bidders. -  The Federal Aviation Administration was poised to
purchase $1 billion in computer services that it did not need, before the Government
Operations Committee intervened. -  NASA, which spends more than $14 billion in
procurement each year, has such a shortage in procurement resources that it faces
excessive subcontractor profits, overpayments for services, low productivity from
contractor employees, poor technical oversight, the payment of inordinately high award
fees for suspect contract performance, and a host of other problems. -  The Pentagon's
failure to monitor problems encountered on the A-12 aircraft contract resulted in a
schedule that was so far delayed and a cost that was so inflated that the entire system
had to be cancelled at a cost of $2.6 billion dollars. The only thing the public got for
its money was six sets of sophisticated drawings.(p. 7) 
Taxes 11 If the federal government was a bank, it would have gone under years ago.
Billions of dollars are lost ever year from its nearly $1 trillion dollars in loan
guarantees. Over 20 percent, or $45 billion dollars, in government loans are delinquent,
and another $18 billion was written off in 1991. As of 1991, the US government had a
total of $900 billion dollars in guaranteed loans on the books. All this money, so much
money, all on the heads of the American taxpayers. Because it's the American taxpayer in
the end who will suffer, it will be the tax -payer that forfeits his or her standard of
living to pay for the flagrant overspending of government. It will be the taxpayer who
gets ripped off in the end because it's the taxpayer that's getting ripped off now.
Conclusion The need for taxes is indeed prevalent in a free society, and not all things
that are supported by the taxes are bad. Indeed, many of the programs that are paid for
through tax dollars are wonderful programs that may only be found in a country as great
as our own, but the other side of the coin seems much larger, larger in respect to the
number of people who support programs that are ill managed verses the number of people
who get to take advantage of such programs that they pay for. The burden of revenue
placed on the taxpayer could be reduced incredibly if government would clean up its bad
habits of blatant overspending. Big government will continue to waste until the
population of taxpayers speak out against such waste. It is only the ignorance of people
that allows the government to continue government programs that have enormous waste. The
people who support the tax base need to be informed about where their tax dollars are
going. Taxes 12 
As the laws that control the availability of government documents loosen, reporters will
continue to inform the public of government corruption and waste. We can only hope that
one-day, government spending will be reversed with the idea that government officials
will be directly responsible for the waste in their departments. Until then, we can only
pay our taxes, and pay attention to where our tax dollars go. 
References Taxes 13 
A decade of decline. (1993). Managing the federal government. 1-20. Dearborn, P. M.
(1993, Summer). Local property taxes: Emerging trends. Internal governmental perspective
10-12 Taylor, A. (1996, May 25). Dole's call for gas tax repeal fails to spark voters
Congressional quarterly report: Economics and finance. 1212 -1378. The economics of
taxation. (1995, November 2). The economics of taxation. Suanders, L. (1995, June 19).
Avoiding the rack Forbes, 13, 208.