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https://www.parlia.com/o/taxation-is-justified-good-for-society

8 comments

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**Taxation is one of the most important elements of any economic system; shortcomings usually come from a specific tax policy or where funding is allocated. Overall, having taxes is more favorable than getting rid of taxes.** Even within an imperfect tax system, [the revenues provided by taxes strengthen, not weaken, a nation's economy]( https://www.brookings.edu/opinions/good-reasons-for-taxes/). The purposes of taxes are to fund essential public goods and services, including highways, schools, biomedical research, national parks, military services, and even indirectly, create private wealth. Although you have to contribute a certain amount of money, the result is to allocate funding to essential national needs for the greater good. There is a fair share of arguments against the purpose of taxation, or at least problems with who must contribute, how much one must give, and how funding should be allocated. The purpose of taxation makes sense when mentioning the good stuff like services, but people do not obtain government benefits and still pay taxes. In that case, the main motivator to pay your taxes is plain and simple: you will go to prison if you don't. This is where ideologies like [anarcho-capitalism]( https://en.wikipedia.org/wiki/Anarcho-capitalism) argue that if all public goods and services should become private, therefore only those who needed the service would pay for it (like a subscription), instead of being threatened to go to prison for not paying for a service you don't even use. If everyone gets to pay only for the goods they want, services can more efficiently meet consumers' demands. The problem with this approach is the difficulties that come with paying for indiscriminate goods: streetlights, emergency services, military services all could result in a costly amount, especially since you wouldn't use these services all the time and people can benefit from them for free. If you're paying for a streetlight, you can't stop another person from using it while driving at night. A private army employed to protect an individual's assets in an area may indirectly be protecting other parts of the community or the area. In both these situations, no one would want to foot the bill for an expensive good that others can indirectly consume for free. Therefore, public goods funded and regulated by institutions that are not motivated by profit are generally needed. [Mainstream politics and ideologies]( https://www.taxjustice.net/2014/10/08/money-taxation-isnt-theft/) are not against taxes, but argue how much should the government take and for what purpose. The economic right believes that the right to tax income is inalienable, or at least should be used to fund only by the absolute necessity of providing society's basic requirements, such as infrastructure and rule of law. The economic left tends to value making society more equal and providing a basic standard of living above the good of letting people keep their own money. Both would not publicly agree with the same tax policy, but both would agree taxation is needed to maintain basic government functions.
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Susyq55y ago
It would be impossible to have a civilised society without taxation. Taxation provides not only for policing, schools, refuse disposal, street lighting etc but for all the essential provisions of the welfare state. Whilst I am often at odds with the way these taxations are spent, controversial cuts to ,for instance library services, I am absolutely sure they are essential in some form Taxation in the UK is far too complicated and those who can afford to pay for good accountants who often save in legal and immoral loopholes more than the accountancy cost. Taxation has evolved over generations but in my opinion would benefit from simplification. Why isn't vehicle road tax spent solely on maintaining roads, national insurance contributions for health provision instead of going into one big pot?
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jsupim14y ago
A society is not civilised at all if its supposed achievements are built upon such an unethical, unjust idea as taxation. Policing, schools, trash disposal, street lighting etc can be provided for by the free market, which is more efficient at it.
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ywang5y ago
**TL;DR: Taxation represents a natural and necessary part of a functioning economy.** The topic of taxation often invites debate among economists. Everyone seems to have a different idea for the perfect tax plan. However, seldom do people challenge the necessity of taxation itself. Taxation is a necessary economic tool to fix externalities. Anyone who sees tax as a disruptor of the free market lacks a basic understanding of economics. Taxation comes as a response to the inevitability of externalities. Externalities mean interests indirectly impacted in a market transaction. In most market activities, firms and consumers represent only the direct people of interest. These activities often end up unintentionally benefiting or hurting third parties. If these impacts are not taken care of, then all market activities become inefficient. Taxation represents the best way to do so. Let’s look at an example of a negative externality. A paint factory can sell its products to consumers. The market price of the pains should fully account for the cost of the productions. However, let’s say the factory is next to a river and puts its chemical waste into the river. Many people may need the water in the river for different reasons, and now they can no longer do so. In this case, these people all have suffered a cost from the paint productions. However, their costs would not factor in the prices of the paints, and nor will they receive any compensation. To make the market transactions of paints perfect, the factory must pay for their costs to the river. However, that compensation becomes very difficult to execute as a private business. The factory cannot track down every person affected and figure out the proper amounts of compensation. In this simplified scenario, taxation becomes the most effective tool to deal with externality. The government can tax the company and use the money to compensate those affected in some ways. In reality, these fixes become very complicated, and many can disagree on how to calculate the externalities (and thus the proper tax rate). However, there is little debate that an efficient free-market economy cannot exist with taxation. For this reason, taxation is a necessary economic tool.
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jsupim14y ago
Your example is a highly unusual scenario. In a vast majority of cases, there is no externality involved in voluntary transactions, so your justification would fail. Furthermore, accounting for negative externalities of an economic activity is not really something I would classify as taxation; in the example of a paint factory, that would rather be a **fine** imposed on the pollutant that would be ideally used for cleanup efforts. In general, taxes are a source of market distortions and a major cause of inefficiencies that are wrongly blamed on free markets.
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For
I don't even know how a country without taxes would even run. I guess they could print money? But that's basically just a different method of taxing after you account for the inflation.
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jsupim14y ago
A state could rely on voluntary donations instead.
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keek214y ago
Without tax the government has no money. The only reason I am not in the strongly agree category is because I don't believe that the current system is fair, specifically for lower income households. I like things such as sugar tax and higher taxes on things like tobacco and alcohol, that makes sense as sugar is causing an obesity pandemic and tobacco and alcohol are harmful so its trying to discourage their sale.
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