Why do taxes exist??

in Project HOPE2 years ago

Taxes

Taxes have been a part of human society from the beginning of time, from the Roman Empire to the Egyptians. But, nowadays, what purpose do they serve, beyond just "raising money for the Government"?

This is not an argument for or against taxes, I only mean to explain why they exist!

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Main Objectives

Taxes as a tool

Taxes can be an Economic tool to fight recessions, by increasing taxes in good times, Governments can encourage companies to moderate themselves, AKA, to take on less debt and to grow slower, which can reduce the probability that businesses will default on loans during a crisis.

Then, taxes can be reduced in bad times, to incentivize companies to take on more projects and investments.

Increase demand for a currency

If, at the end of every month, everyone had to pay 1 STEEM to keep using Steemit, the demand for STEEM would increase, meaning, everything else being equal, the currency in which you had to pay taxes in would become more valuable!

The same thing applies for taxes in dollars, euros, etc.

Optional Objectives

Beyond the macro-economic essentials, taxes can also achieve a range of secondary goals:

Wealth Redistribution

They can be set up so that richer people pay a greater percentage than poor people, meaning the less fortunate members of society have a bigger chance to get wealthier, because, among other things, they would have a bigger slice of their income to invest.

Changes in Behavior

Fast food taxes and tobacco taxes, for example, don't prohibit anyone from doing anything. Instead, they try to change the population's behavior, ideally steering them into more productive and healthy habits.

Enviorment Protection

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Namely, taxes are a powerful that can be used to a greener economy, as they penalize those who fall behind schedule, without taking away their chance to become Carbon-Neutral

Conclusion

While many see taxes as mostly useless, everyone should still be able to comprehend the reasons given as to why they exist even in the 21st century!

Remeber, Death and Taxes are The Unavoidables ;)

Now, do you agree with most of the taxes that exist in your country? Leave your answers in the comments below!

Thanks for reading!
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