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Taxes: A social contract

By Kelley Atherton

It's April 16, so hopefully most of you have filed your taxes.

Ah, tax returns. The bane of every hard-working Ameri-can's spring—keeping people inside plowing through paperwork when they could be outside in the sunshine.

Hey, at least you're getting that tax rebate.

Blame taxes on the social contract theory. This philosophy dates back to Socrates. The theory became popular in the 17th century along with ideas of democracy.

Philosophers such as Thomas Hobbes, John Locke and Jean-Jacques Rousseau were contemplating freedom and what it means to be free. Humans have to give up their freedom to have order. Rousseau summed it best by saying, "Man is born free; and everywhere he is in chains."

The social contract is an agreement between humans and their government. We will give money in exchange for protection of our lives and properties—kind of like a bodyguard. Originally taxes were supposed to be voluntary gifts.

"Men surrender a part of their profits in order to have time to increase them at leisure. Make gifts of money, and you will not be long without chains," Rousseau wrote in "Social Contract" in 1763.

This theory had a direct effect on the authors of the Constitution as it is acknowledged that the government must work for the people in exchange for taxes. Taxes are very important to the government—they are its source of income. There's just no way to get around it.

Article 1, Section 8, Clause 1 of the Constitution states "The Congress shall have the Power To lay and collect Taxes, Duties, Imposts and Excises to pay the Debts and provide for the common Defense and general Welfare of the United States."

An option is to claim deductions and earn credits to get back as much of your taxes as possible.

The best way to prepare for next year is to simply stay organized. Keep any paperwork and receipts that will come in handy next year tucked away in a safe place.

Start thinking about tax credits now. There are credits for your children, having a low income, paying student loan debt, putting solar panels on your house or buying an alternative fuel vehicle.

Last week, the Senate passed renewable energy tax incentives as an amendment to a housing bill. This would provide up to $500 for consumers to install energy-efficient products in their homes. Businesses that manufacture and install solar or photovoltaic fuel cells would also get a 30 percent investment tax credit.

Contributing to a 401(k) or IRA can also get help you save on your taxes by planning for retirement. You can contribute up to $15,500 to a 401(k), $10,500 to a Simple IRA plan and $5,000 to a regular IRA.

Education can not only help you or your child get a better job, but a tax break. In 2007, if you're single and made less than $65,000 or $130,000 on a joint return, you can claim a college-tuition deduction of as much as $4,000 for yourself or a dependent child. There's also the Hope or Lifetime Learning tax credits, but income levels have not yet been set for 2008.

There's a long list of tax credits, the ones above are just for individuals. Next year, be sure to go item by item when filling out your tax return or get someone you trust to fill it out.

In the meantime, get ready to go spend your tax rebate. Your country needs you.

 
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