Taxes are the primary source of revenue for the government. In the United States, the local, state and federal governments must impose taxes on individuals or entities within their jurisdiction. Payment of taxes is compulsory and can be enforced by law in the event an individual deliberately fails to pay their tax liabilities. Most governments have agencies that are responsible for the collection of taxes. In the United States, the Internal Revenue Service (IRS) has the mandate to collect taxes on behalf of the U.S government. There are various types of taxes that individuals or entities are expected to pay. The common types of taxes include; income tax, corporate tax, sales tax, property tax, and estate tax. Taxes are known to influence human social behavior and economic growth in the United States. Retirement, quality of education, infrastructure and provision of other social amenities are some of the issues influenced by taxes. Some of these social behaviors are discussed below.
Retirement
Taxes significantly influence the retirement plans of most of the U.S citizens. This is because the government has a way of taxing individuals even after retirement. Most people are faced with the sad reality that they will still pay taxes even after their retirement. The elderly form the majority of the American citizens. This means that these people have the potential to generate a lot of revenue for the government. As a result, they are expected to pay taxes even in their old age. There are some older and less well-off individuals who are exempted from taxation. However, the majority of the retirees are expected to pay taxes to the government.
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The retirees have income in the form of pension payments and individual retirement account distributions. The government considers this as a source of income and therefore imposes an income tax. Also, the Social Security benefits are subject to taxation by the federal government. The taxation after retirement influences the retirement plans of most individuals. Most people tend to work beyond the retirement age to secure their future. These individuals opt to work some more years because they are afraid there is insufficient money to meet their needs after their retirement. Other individuals take up two or more jobs to increase their income and probably their retirement savings. Most aged people live in fear of outliving their savings, and this causes tension and anxiety in most people. Taxes also influence the movement of retirees from one state to another (Forman, 2000). This is because there are states that do not tax pension payments. Individuals may opt to move into such states if they are afraid that their savings will not sustain them for the rest of their lives. Taxes imposed on Social Security benefits may also demotivate individuals from making contributions towards such schemes. The choice of when to retire and where to live after retirement is significantly influenced the taxes imposed on retirement income taxes.
Maintenance of Infrastructure
Taxes influence the economic growth of any country. The income generated through taxes is used to develop vital economic pillars such as infrastructure. The U.S government is responsible for the provision of adequate infrastructure to the citizens. Infrastructure cannot be provided by individuals or corporates however much the society desires. Goods roads are an essential part of the economic growth of a nation. Transport systems play a vital role in the supply chains of goods and services. The systems allow for convenient movement of trade goods from where they are produced to where consumers need them. Most industries rely on transport systems developed by the government to move their products to consumers. A country that has well-developed infrastructure becomes a beehive of economic activities that contribute to economic growth. Taxes collected by the U.S government are used to improve infrastructures such as roads, highways, airports, and harbors. Increased tax rates would mean the government would generate more revenue hence it would be in a position to allocate more money in the infrastructure development budget. The citizens enjoy the benefits of their taxes through the use of the infrastructure to carry out their economic activities. However, it is important to note that if the government spends its revenue to develop the wrong infrastructure; this will slow the economic growth since very few people would benefit from it (Shatz, Kitchens, Rosenbloom, & Wachs, 2011). For instance, spending so much on international airport development at the expense of roads construction would not have substantial economic benefits to the country.
Social Programs
Taxes also influence the government’s ability to initiate social programs that benefit citizens. For instance, the government U.S government uses tax to impact the quality of education and healthcare. The revenue collected can be used to improve the quality of education which can have long-term economic benefits. Quality education would mean an increase in the skilled labor force which is critical in a growing economy. Also, improved education standards are likely to encourage innovation and inventions which are essential in economic growth. Education also improves the standards of living of people since educated individuals are more likely to get employed in the formal employment sector. Such individuals improve the economic standards of their families, and hence general economic growth is experienced.
Improvement of the health sector is critical to the growth of the economy. The taxes influence the provision of healthcare by the government in that with increased revenue, the state can improve the health facilities. As long as the citizens can see improvement in the provision of social amenities, they would be willing to pay more in taxes to increase government revenue.
Reaction towards the poor and the aging in the society
The poor and the elderly are the most vulnerable members of the modern community. The poor do not have a steady flow of income that can sustain their basic needs. This means that most of them barely survive with the limited income they get. The impact of this is that they are unable to offer quality education to their children and they are unable to access quality healthcare. Also, they save little for their retirement which means they will not be able to sustain their needs when they are aged and unable to work. Most of these needy individuals are horrified when they age due to uncertain financial stability. The elderly on the other hand tend to spend most of their savings within the first few years of their retirement. This leaves them with little or no savings to sustain their lives. This makes some of them work beyond the retirement years to increase their savings for fear of the unknown. This trend is true not only in the United States but across other countries in the world.
However, there is another twist to the situation. Statistics indicate that the elderly population in the world has significantly increased over the years. The population of those individuals beyond the 65 years age bracket has risen by almost 7 percent since 1950. This population is expected to keep growing with time. The impact of this is that the dependency ratio will significantly expand over the years. The number of non-productive individuals depending on the productive and working individuals will grow as the elderly population increases ("Chapter 13. Aging and the Elderly – Introduction to Sociology – 1st Canadian Edition", 2018). For instance, about 178 million citizens in China are above the age of 60 years. This means that about 13.3 percent of the total population in China is in the age bracket that depends on the working population. By 2050, about a third of China’s population will be above the age of 60 years (Guerchet, Guerra, Huang, Lloyd-Sherlock, Sosa, Uwakwe, & Mayston, 2018). This means that a significant burden will be placed on the working population and this may have an impact on the economic growth of China shortly.
The aging population also places significant stress on the provision of healthcare. This is because as the individual's age, they will require specialized care that the working population may not be in a position to provide. As a result, they will be forced to hire specialized healthcare for their aged family members, and this will increase the costs of elder care. The working individual’s income will be significantly affected by the rise in elder care costs which may affect their savings ability in the long run.
Different cultures view caring for the elderly in varying perspectives. In most Asian countries, caring for the aged is considered to be the responsibility of the family members. The family members, therefore, ensure that their elderly member is taken care of until their death. The basic needs are provided to the aged member unconditionally. In China, caring for the elderly is considered as an attitude of respect to the parents and ancestors. It is therefore regarded as a value to care for the aged. However, in most Western Countries, caring for the aged is viewed as a voluntary gesture ("Chapter 13. Aging and the Elderly – Introduction to Sociology – 1st Canadian Edition", 2018). This means that the elderly are expected to take care of themselves without the assistance of a family member. In North America, family members may take care of an elderly member of their family on the condition that they will benefit from future returns such as inheritance from the elderly. Most individuals consider taking care of the aged as a burden since most of them are employed away from home such that they are unable to provide care to their aged relatives.
Poverty is often associated with old age in most countries. This is because most of the older adults spend much on their savings on health insurance and other specialized healthcare services hence depleting all their finances in the first few years of their retirement. If the attitude of the working population is that the aged are a burden to them, they fail to provide care to them hence most of the aged people live in poverty after retirement. Individuals should change their view of the elderly and take care of them when they become too old to care for themselves. The government should also come up with programs that will ensure that the elderly have a comfortable and secure retirement.
References
Chapter 13. Aging and the Elderly – Introduction to Sociology – 1st Canadian Edition. (2018). Retrieved from https://opentextbc.ca/introductiontosociology/chapter/chapter13-aging-and-the-elderly/
Forman, J. (2000). HOW FEDERAL PENSION LAWS INFLUENCE INDIVIDUAL WORK AND RETIREMENT DECISIONS. The Tax Lawyer, 54(1), 143-184. Retrieved from http://www.jstor.org/stable/20772220
Guerchet, M. M., Guerra, M., Huang, Y., Lloyd-Sherlock, P., Sosa, A. L., Uwakwe, R., ... & Mayston, R. (2018). A cohort study of the effects of older adult care dependence upon household economic functioning, in Peru, Mexico and China. PloS one, 13(4), e0195567.
Shatz, H., Kitchens, K., Rosenbloom, S., & Wachs, M. (2011). The Effects of Highway Infrastructure on Economic Activity. In Highway Infrastructure and the Economy: Implications for Federal Policy (pp. 15-42). RAND Corporation. Retrieved from http://www.jstor.org/stable/10.7249/mg1049rc.9
