English Essay on “Taxation” Complete Essay, Paragraph, Speech for Class 10, Class 12 and Graduation and other classes.

Taxation

Josephine, Emperor Napoleon’s wife, is reputed to have made the famous remark about the certainly of death and taxes. About two hundred years later, even in the age of tax havens and tax-free investment options, taxation is as relevant to society as it has ever been. In the tax havens of the present, though income and investments may not be taxed, the services these havens provide to the public are more expensive than elsewhere: thereby substantially diminishing the advantages of tax freedom. On the other hand, the tax-free investment options which many governments provide are, in a way, meant to encourage people to save money and to make it available for development. Since they serve the interests of both the public and the government, these options are much more prevalent, and certainly more viable. But in the case of both tax havens and tax-free investments, there is no such thing as a free lunch. What one takes with one hand has to be returned, to some extent, with the other. Therefore, taxes either visible or concealed are a certainty; which suggests their inevitability.

But why is taxation what it is and why are taxes unavoidable? Part of the answer lies in the basic human need to depend on one another, and in the collective inability to survive without the support of natural resources and the general environment. In other words, there is no such thing as independent existence or survival without responsibility. It is this responsibility that quantifies as tax, which is what we have to part with for what we take from around us, to live.

From this rather wide and expansive connotation of the word ‘tax’, we have now restricted its meaning to a form of payment made to the government. This scaling down of the sense of the word has both advantages and disadvantages. Since its meaning has been limited, taxation has become more easily understandable, more easily assess able, and more importantly, more easily payable. We can know how much to pay, to whom, and quite often, for what. But such simplicity in the interpretation of taxation has made taxes seem like unavoidable, enforced charity. The tax man is often seen as an unwelcome pest savoring our hard-earned goodies. Moreover,’ since taxes are seen as a form of charity, they are paid with scorn, derision and a sense of loss.

Taxpayers take pride in their ability to pay taxes, and thereby, to support social development. They also, quite justifiably, demand in return social respectability for themselves and security of their interests. However, though their demands are justifiable, taxpayers should not forget that they do not create their wealth themselves, independently. They have to depend on something, be it natural resources, or fellow human beings, to earn what they have, and that it is in the fitness of things that they should return a part of what they earn, to those that made such earning possible. With such a background explanation, tax payment can be seen more as an act of obligation than as a gesture of charity.

Nevertheless, taxpayers are not those only responsible for distorting the idea of taxation. Governments, to whom tax payments are made, are equally responsible for confusing, and more so, for abusing the aims of taxation. Governments often forget that their authority to collect taxes is based on an unwritten, ethical contract between them and the community, which includes the tax-payers. In return for the taxes they collect, governments are responsible for safeguarding the reasonable interests of the community. Expressed differently, with the money they earn as tax, governments should build and maintain public services, like roads, sanitation and water supply facilities, and every other input necessary for the welfare of a community. The community will only be too happy to support governments that are sincere, responsive, responsible and productive in fulfilling its needs with its tax money. Such governments will experience voluntary, whole-hearted payment of taxes, not stealthy concealment of wealth, which may, unless coercive methods are adopted, be difficult to expose. People’s reluctance to pay taxes is due more to their lack of faith in their government’s ability to use such taxes meaningfully than to personal greed or miserliness, which prevents them from parting with their money.

People with surplus money may evade tax payments, but they will not be unwilling to give money to charities, as offerings in places of worship, or even to spend on extravagance. Obviously, they get more joy from such pursuits than from tax payments. But, government integrity and responsibility will not lead to tax compliance, if tax rates are too high. In the welfare states of north and west Europe, the responsibility and scruples of the governments in managing tax money have increased tax revenue, but only to an extent. As the der-land for social expenditure funds is far out-stripping the potential for taxation, many welfare states have progressively been shedding their obligations to society.

If tax compliance is an advantage in such welfare states, it is a source of disappointment in countries like India, where widespread corruption, total disregard for scruples and a tendency to squander public wealth rule the roost In such situations, because of the above factors, tax evasion, though legally criminal, may be morally prudent!

While recognizing the necessity and inevitability of taxation, its policies should be so framed that they are practicable and compile able. A government that has the aptitude and resolve to use tax money for the benefit of the community, may tax the community more; and that which does not have such qualities, may tax less. As agencies authorized to tax, it would be better for governments to remember that their aim is to develop society, not merely to tax it.