There is an old saying, "Nothing in life is certain except death and taxes." The first part is true for everyone and the second certainly true for anyone in the United States who is of legal age, has a job, or ever buys anything. Income taxes, payroll taxes, and sales taxes are just a few of the fees that local, state, and the federal government impose on its citizens.

Even though the revenues raised from these taxes are well spent, for the most part, often going to provide for a national defense, the general operation of the government, even the collection and disposal of garbage, it does not make it any easier seeing one's hard-earned money vanish. However, understanding where tax money goes and what it is used for might soften the blow.

Types of Taxes

There are more types of taxation than one can shake a stick at. Most everyone is familiar with the federal income tax and the local property tax, but throughout history governments have imposed tariffs on just about everything from cooking oil in Ancient Egypt to official documents in Colonial America. During the Middle Ages, a time of great exploration and expansion of trade around the world, governments relied heavily on import and export duties.

One of the most popular areas for taxation throughout history in the United States and the British Empire are what are called "sin taxes," levies imposed on substances such as alcohol or tobacco, often considered vices. There have been times in the history of the United States where the government was financed mainly through these sin taxes. These days, taxes on property and income provide the bulk of operating revenue for state and the federal government, but cigarette and liquor remain perhaps the most heavily taxed commodities.

Taxation Legislation

Over the history of the United States, taxation debates continually have occupied the time of Congress and presidents. During the Great Depression of the 1930s many social relief programs were instituted, including Social Security in 1935. As benefits grew, so did the need for additional revenue, reaching a head in the 1950s when the Bureau of Internal Revenue became the Internal Revenue Service (IRS) in 1953.

President Ronald Reagan instituted broad reforms in 1981 and every president since then has tinkered with the tax system. The tax system Americans know today is a result of these readjustments, which are ongoing.

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