The United States has a big budget. We have to pay for things like schools, roads, hospitals, the military, government employees, national parks, and so forth. The only way to pay for these things is for the government to get money from people and companies. People and companies pay a percentage of their income to the government. This is called the income tax. The government taxes our income so it can have enough money to pay for the things we all need.

Congress and the President of the United States are responsible for writing and for approving the tax laws. The Internal Revenue Service is responsible for enforcing the tax law, for collecting taxes, for processing tax returns, for issuing tax refunds, and for turning over the money collected to the US Treasury. The Treasury, in turn, is responsible for paying various government expenses. Congress and the President are also responsible for the federal budget. The budget is how much the government plans to spend on various programs and services. When the government spends more money, it must raise more money through taxes. When the government spends less money, it can afford to lower taxes.

Why do we have taxes at all?

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