Question

Why do you think people cheat on their taxes?

What could the government do to decrease how much/many people cheat on their taxes?

Do you think that if people knew exactly where their tax dollars were going they'd be less likely to cheat on their income taxes, why or why not?

Answer 1

According to me most of the people who cheat on tax are the people who are doing business. It's hardly possible to cheat on tax if your are an employee as your employer makes sure all your taxes are deducted on your income unless you are into cash jobs. So the question is why people cheat on their taxes, there may be several factors for doing that like

1) doing an prohibited or illegal business:-

If someone earns income above the specified amount he is laible to pay taxes but if someone is into a business that's prohibited in his or her state would hide that income from the taxation authority to hide his or her crime.

2) To increase net income :-

Another common reason why people cheat on taxes is to increase there own income. They do this is many ways for example showing fake expenses to reduce the taxable income.

3.) People believe taxation system is unfair:-

Some people cheat on their taxes because they believe that the taxation system is quite unfair and the tax money is used for unwise purpose.

Government can decrease cheating on the tax by setting up an auditing committee which should cross check all the expenses accounted by a business and all income earned during the taxable year.

Government should also make strict laws for the tax cheats and announce punishment for the Person found guilty which will refrain people cheating from tax

If people would know exactly where their tax dollar is going or used they would reduce the cheating on tax so government should make sure that they should release report on the amount of tax money received and how is that money used in different areas.

When people would get to know that their tax dollar is used for their on betterment like :- infrastructure , healthcare, development etc they would understand importance of tax and would less likely cheat on that.