▶ Your Answer :
The terminology of taxation has
been existed along with human evolution. Taxation has been used as the form of
collection of the government's revenue. So that, the government could be able
to spend on various places for the improvement of public services. However, the
ways of earning the income are changing rapidly, whereas the taxation system is
not developed accordingly.
The income tax is the main form
of the government's revenue. The higher income earners would be paying higher
income taxes, and thus, the more revenue will be able to be collected by the
government. The government collects a quarter of revenue from the income tax.
This accumulation of tax is then used to provide a various services for the
citizens' comfortable living such as health, education, medicine, technology,
research and development, finances, foreign affairs, and constructions.
Therefore, the income tax is performing as a useful function providing the
quality of lifestyles for citizens.
In contrast, the income tax does
not actually work in the theoretical sense, because people from the higher
income brackets do not pay the higher taxes. Since the society changes rapidly,
the income sources have also changed and the number of ways to do tax evasions
are increasing. However, because the current income tax system does not update
with the a trend, the lower income earners would have to bear the costs. Therefore,
the actual income taxes would not be effective and efficient compared to its theory.
In conclusion, the tax can become
a main earning source for the government for the provision of various public
services. However, since the taxation cannot cope with the changing of earning methods,
the income tax is not efficient.
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