Tax Season has Arrived : The Hounds will soon be Released

February 26, 2012

A few weeks ago, I decided to get an early start on my taxes and gathered my documents in order to initiate this excruciating yearly obligation. As I am growing up and maturing, I am starting to not only relate but also to understand why the elders in my life always had such disdain for the taxation system.

It also seems as if the more money one makes, the more money comes out of one’s pockets. However, if you keep it up and continue accumulating wealth to eventually become part of the 1% that runs the world, you will have the luxury of benefiting from all sorts of tax exemptions.

It has come to the point that even the silver spoons have come to realize that they were not subjected to the same sacrifices that us proletarians are subjected to. To add insult to injury, we need to make sure that our books are in order because if we miscalculate, there is no second chance made possible by bailouts.

Warren Buffett, an American business magnate and investor, disclosed that he made almost $63 million last year, yet paid less than $7 million in federal income tax. Mr. Buffett long has urged lawmakers to raise income-tax rates on the wealthiest, arguing that his secretary paid a higher effective rate than he did last year.

How can this be?

Before passing judgment, I decided to investigate. After all, I always pride myself in being a fair and reasonable person.

I decided to knock on the Internal Revenue Service’s door, instead of the usual other way around.

As we all know, the IRS, a bureau of the Department of the Treasury, is responsible for collecting taxes and the interpretation and enforcement of its regulations and codes.

Federal income tax was introduced with the Revenue Act of 1861. In 1863, during the Civil War, President Abraham Lincoln and Congress created the office of Commissioner of Internal Revenue and enacted an income tax to pay war expenses. Because it was passed as an emergency and temporary tax, it was repealed, re-adopted, and then held unconstitutional.

The initial rate was 3% on income over $800, which exempted most wage-earners. In 1864, the rate was 5% on income between $600 and $5,000; 7.5% on income $5,000–$10,000; and 10% on income $10,000 and above.

Nowadays, most of the world’s highest tax rates can be found in western European nations. Belgium tops the list, with a marginal tax rate that goes as high as 54%. Finland imposes 46.6%; Germany, 45%; Denmark, 44.4%; Italy, 43%. In addition, France enforces a tax rate on average workers of about 40% (and a top tax on high-income workers of nearly 50%), France is long-known for sacrificing economic growth to social benefits handed out by government. Unsurprisingly, the European country with the lowest marginal tax rate on average income workers are Switzerland, at 20%.

The United States is still relatively tax-friendly, with a marginal tax rate of around 27% on averaged income workers.

Canada is taxed in a manner similar to that of the United States, imposing a 31.2% marginal tax rate on average income workers. When the Canadian federation was formed in 1867, the British North America Act attempted to create a federal government with virtually unlimited revenue gathering abilities…..What?!!?

The federal government was entrusted with the high cost programs of the time, most notably defence and the building of railways.

During WWI, a tax on income was introduced as a temporary measure to fund the war. The income tax has since become a permanent feature of the Canadian tax system. The Canadian Revenue Agency (CRA) has been in charge since … eh!?

I have to admit that things could be worse. Nevertheless, things could be so much better!

Some countries are completely exempted from income tax: such as the Bahamas, Bahrain, Kuwait, United Arab Emirates, Maldives, Oman, Qatar, Monaco, Saudi Arabia and North Korea.

What if one decides to halt its “contribution” to the government? One would wake up one day and shout: “enough is enough”!

Well… in response to that, the IRS would respond:

“Release the Hounds!”

You better believe that the Internal Revenue Service, Criminal Investigation (IRS-CI) will eventually get to you. The government might be slow but never sleeps nor forgets.

The IRS-CI investigates potential criminal violations of the U.S. Internal Revenue Code. While other federal agencies also have investigative jurisdiction for money laundering and some bank secrecy act violations, the IRS-CI is the only federal agency that can investigate potential criminal violations of the Internal Revenue Code.

Despite allegations of abuse of power and cover ups, they retain legal authority to enforce liens and seize assets without obtaining judgment in court. They never back down; even the underworld is wary of this agency. One of the most notoriously untouchable mobster, Al Capone, was eventually caught by the IRS and went to jail for tax evasion.

On this note, you can pretty much get away with everything, with good counsel … as long as you pay your taxes.

Pay up, Chumps!! We’ve got Wars to finance!!!

Copyright © 2012 Thus Always To Genius. All Rights Reserved.


One Response to “Tax Season has Arrived : The Hounds will soon be Released”

  1. s.tanwani said

    Really enjoyed reading this article. Looking forward to read more entertaining content. Keep up the good work!

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