Why Do We Pay Taxes? The Opposition of Government and Taxpayer
If to wonder why people pay duties, one can find only one logical answer – because it is an important obligatory procedure, which is established by a government, and people have to foot their bills. Concealment of the taxes or tax evasion is fraught with a variety of sanctions from the fiscal authorities for tax resident of the country.
Wrong psychology or stealing is bad.
Peculiarities of the human mentality make us considering various decisions of reducing the taxable base as something illegal. And for many people, tax evasion or reduction of the taxable base are associated with violations. Surely, for any country, it is profitable that this situation remains unchanged, and the payment of duties looks like a civilized and noble process as a result of the free will of the citizen.
But this problem is not so simple, if to contravene is bad, and it is risky not to pay the duty levied by the country.
The motivation of a taxpayer
There is a simple definition of who a taxpayer is. According to it, the meaning of this term is as follows: a citizen (individual) or a company (legal entity) obliged to foot the bills. For clarity, some examples of the motivation of citizens to pay the levied taxes can be given. Let’s consider how does the governmental scheme work and what are the possible consequences of non-paying the duties.
For example, you don't have enough time to pay for the property or another duty. What is waiting for the duties defaulter? First of all, the authorities will try to notify you in written form about the appeared debt, in other words, you will receive a notification from the appropriate fiscal body. Then, in case of no response, you will have to meet with the representatives of the authorities, with all the ensuing consequences, up to the imprisonment and confiscation of the property.
Of course, it is a very superficial schematic description of the work of the fiscal authorities, and there can be a number of intermediate stages between the main stages of levying taxes. But, the key one is the first contact of the country and the taxpayer, namely the written notice.
The purpose of the written notice is to make it clear to the taxpayer that it is better to fulfill this requirement on a voluntary basis and to identify the risks of non-payment of duties. For the majority of the potential taxpayers, it is enough to send a written notice to motivate them for payment.
Your motivation when paying taxes
For example, you pay duties purely for civil motives. For you, such an act is an action that characterizes you as an active and responsible citizen. When we foot our bills, we remain honest and show the public consciousness. You realize that your taxes will be spent on building roads, hospitals, wages for public employees, etc.
Now, imagine that paying taxes is no longer compulsory, the government made it voluntary. We will also be receiving notifications, but we can ignore them without any negative consequences and sanctions from the country. The country has no longer the means of influencing and taxes are paid at a will. What will we say? Do we still want to foot the bills monthly?
If the answer is negative, it means that the primary statement with reference to the civic stand and voluntary payment of the duties is false. Dare to admit that you square up taxes only because of the fear of liability to the country. And it is normal.
Let’s presuppose that we are willing to pay duties even on a voluntary basis when the country gives the right for a choice. For example, the submission of the tax returns is implemented in usual way, one time at the end of the tax period. You are reported that your filed declaration does not match the stated form, and you need to come again to add and to correct the information. In addition, we are liable for a fine for the expired days, do we still want to pay taxes voluntarily?
A negative answer to this question is a clear indication that we square accounts, just because of the fear of the liability provided by the legislation.
Now let’s suppose that in order to reduce the tax burden, you are actively engaged in charity. But, under the current rules, it does not affect the taxable base, and you have to pay duties on a common basis. Are we ready to do charity work and, in parallel, to pay a percent to the state treasury for it?
If «Not,» then your motivation to foot the bills is the fear of the liability provided by the legislation.
You continue to pay duties, in spite of everything. There is a coup d'etat in the country and change of the ruling power. Now the activity of the previous tax service deemed illegal, and the competing market participants come on the stage. The counry values are reestimated, but the taxes remain voluntary.
Are you ready to continue to square tax bills voluntarily?
The main motive of an assessee was and still is a fear of occurrence of the certain legal consequences. We pay taxes, only because duty evasion or failure to pay, the country can bring us to justice with all the ensuing consequences. In fact, the country tax system is the ideal mechanism for levying taxes from the citizens.
Once you understand this idea and get a feel of its content, you will start searching for the mechanisms and tools for protection and prevention. It is obvious if one understands that he/she is systematically looted, this person will look for the appropriate protection, namely optimizes taxes.
And the fact, that in a civilized society, an assessee should be considered as a deficiency in the country system. Consider the optimization of the taxable base, not as a way to reduce the payments to the budget, but as an opportunity to earn more, and then you will get the understanding.