Taxes have been in existence for a long time in America. In the early days, there was little to no taxation on American citizens. As time grew, so did the taxes. Several kinds of taxes were added and were made mandatory to be paid off. In modern dates and time, income taxes, estate taxes, corporate taxes, etc. exist. All of these taxes are mandatory and not paying them is punishable by law. There were several tax acts passed by the government. Probably the first-ever tax act was the Estate Tax enacted in the year 1797.
The modern-day estate tax was passed in the year 1960. The tax act for federal income was very important. However, this tax act was implemented in the year 1913. The reason why this tax act is important is that it helps the government keep a check on the monetary flow of the country. Moreover, there are several tax acts passed by the government for various reasons. Some of them are mentioned below.
Some of the Important Tax Acts
The Sales Tax Act:
This act was first implemented in the year 1921 in the state of West Virginia. This tax was to be enforced on the sale of various essential goods and services. After West Virginia, in the year of 1933, there were 11 other states that implemented the same tax. By the time the year 1940 came, there were 18 more states that had the same tax in place.
The Gift Tax Act:
The Gift Tax Act was imposed in the year 1924, to prevent the citizens from giving their valuables to relatives to escape taxation. A Gift Tax is applied when an individual gives something of high monetary value to someone else. For anything to be considered a gift the receiver should not pay the giver the full amount. The receiver may pay less than the full value. This tax act is important since it helps deal with issues like tax fraud. It happens since it holds the owner responsible for their belongings
The Social Security Tax Act:
This act was introduced by President Roosevelt in the year 1935. The government, however, collected their first Social Security Tax in the year 1940. Social Security tax act was introduced for the older sector of the society. However, this tax is paid by young working citizens to support the old and retired citizens.
Alternative Minimum Tax Act:
This act was introduced in the year 1978. This tax was implemented to prevent citizens from avoiding their taxes. Moreover, this act checks taxable income after allowed reductions. The types of taxes are different at every level. However, there are some tax acts which are only restricted to one state or one locality. The United States and Eritrea are the only two countries that impose taxes on even their non-resident citizens. For residents and citizens, these taxes are imposed after calculating their worldwide income. For non-residents, it is imposed by calculating the income within the jurisdiction. Moreover, the taxes vary according to an individual’s income as well. If the income increases, there is a proportionate increase in the tax.
