A majority of the working force pay taxes on various things. They have to provide their income to the government and the government takes a certain percentage from this income for their own purposes. This is a practice that has been constant for decades. Some people are honest enough to show their true income and have it taxes while others are not so. Although this is a great offense, paying taxes is common. But, where does the tax money go? What do governments use tax money for?
Many people either overestimate or underestimate the whereabouts of their tax money. They have no idea about what happens to it once it goes into the government. But first, let’s see what tax money is. Tax is a sum of money demanded by a government. It is required to ensure that various facilities run smoothly. Various people are taxed differently. Most often, it is done according to their income. For many it is a great burden. However, it is compulsory and is necessary to run a country.
What happens to a person’s tax money? Two things can happen to tax money. The first is that it is taken out of a person’s income and used for infrastructure and the development of a country. It is used to build roadways, to build high-rise buildings, dams, transport, education, health, houses, trade and industry etc. For example, people are given free medicines and health care checkups in some countries. This is done through tax payers’ money. Although certain taxes have been in effect for decades, new taxes have been implemented by governments to earn more revenue for the country in order to improve the country. However, all these tax money goes into a federal fund where annual spending amounts are allocated by the government and handed out when necessary.
The second thing that happens to tax payers’ money is the disappearance of this money. Many developing countries charge taxes on various things and these taxes tend to disappear once it enters the government stream. There is no outstanding infrastructure or a proper health care system or any sign of development in a country. But, the taxes keep increasing. Why does this happen? This is because many corrupt politicians pocket the tax money. They allocate huge taxes on essential things and use this money to run their personal affairs. For example, many governments in third world countries have been under suspicion of handling tax money illegally. Some even have offshore accounts where other people’s money gets them exorbitant amounts of interest.
A person is legally obligated to pay taxes. Any person found not paying taxes can be held accountable and either asked to pay the shortfall or be jailed. It is not fun paying taxes, especially when the tax money goes into politicians’ pockets. However, it is something that has to be done because not paying taxes and getting caught, is not fun either.