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Taxes are an integral part of every country's economy. They are considered the lifeblood that helps the government raise funds to provide necessary services such as healthcare, education, and infrastructure development. Over the years, taxes have undergone various changes, and the way they are collected and monitored has also evolved. In this post, we take a look at the evolution of taxes and how technology has impacted the way we pay taxes.
Evolution of Tax Freedom Day
The concept of Tax Freedom Day was first introduced in the 1940s by the Tax Foundation, a non-profit organization based in Washington D.C. It is the day of the year when the average American has earned enough to pay their federal, state, and local taxes for the year. The infographic above shows the Evolution of Tax Freedom Day from 2007 to 2008. As you can see, Tax Freedom Day has been moving later in the year, which means that Americans are paying more taxes.
The Evolution Of Tax Technology
The way taxes are collected and monitored has undergone significant changes over the years. With the advancements in technology, the process of filing taxes has become more convenient and efficient. The above infographic shows the Evolution of Tax Technology, from the manual process of filling out paper forms to the current online filing system. With the introduction of e-filing, taxpayers can now file their taxes from the comfort of their homes, reducing the need for physical visits to tax offices. The use of automation tools has also made the process of tax collection and auditing more accurate and fast.
How The Tax Cuts and Jobs Act Evolved
The Tax Cuts and Jobs Act (TCJA) is a tax reform bill that was signed into law in December 2017. The above infographic shows the Evolution of the TCJA, from its introduction as a proposal to its implementation. The TCJA aimed to simplify the tax code and provide tax relief to individuals and businesses. With the introduction of new tax brackets, increased standard deductions, and tweaks to deductions and exemptions, taxpayers saw changes in their tax bills. The TCJA also impacted businesses, with reduced corporate tax rates and the introduction of new tax deductions.
Evolution of Service Tax in India
Taxes in India have also undergone significant changes over the years. The above infographic shows the Evolution of Service Tax in India, from its introduction in 1994 to its current state. Service Tax is a tax levied by the government on all services, excluding a few specified services. Over the years, the scope of Service Tax has been expanded, and the tax rate has increased, impacting both service providers and consumers. The introduction of the Goods and Services Tax (GST) in 2017 replaced Service Tax and other indirect taxes, providing a more unified tax structure for businesses and consumers.
IRS Drops Longstanding Promise Not to Compete Against TurboTax
The above image shows how technology has impacted the relationship between the Internal Revenue Service (IRS) and tax preparation software services such as TurboTax. In January 2020, the IRS dropped its longstanding promise not to compete against tax preparation software services. As a result, the IRS launched its own Free File Program, which allows eligible taxpayers to prepare and file their federal tax returns for free. This move has been both praised and criticized by taxpayers, with some welcoming the competition and others concerned about potential conflicts of interest.
In conclusion, taxes have always been an essential part of any country's economy, and their evolution has impacted individuals and businesses alike. With advancements in technology, the process of tax collection and payment has become more efficient and convenient for taxpayers. However, it is essential to keep in mind that taxes are crucial for the functioning of society and ensure that the necessary funds are available for the provision of essential services.
The Evolution of Tax Day: From Paper Forms to Online Filing
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