Is forced taxation necessary to raise revenue? (user search)
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  Is forced taxation necessary to raise revenue? (search mode)
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Author Topic: Is forced taxation necessary to raise revenue?  (Read 5622 times)
Shadows
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« on: March 06, 2017, 01:37:21 PM »
« edited: March 07, 2017, 01:15:20 PM by Shadows »

Yes. Taxation in itself is forced. That is how it is different from charity. It is forced not voluntary.

For one taxation & government is the basis for growth whether it is having a society, law & order, education, basic regulations or some welfare net to prevent people from dying.

Can enough voluntary money be raised ? No.

You have to learn about property rights in general & the tragedy of commons. Put a common resource like land in the earlier days & look at over-grazing. Everyone & their grand-dad will want to enjoy the benefit but no1 wants to pay if its voluntary unless society has a way of enforcing it. Would the Koch brothers want to pay or the billionaires who accumulate huge money? Everyone will feel they pay more & get a raw deal & year by year it will fall leading to a collapse of the nation in itself.

Other that other ways to go away from Taxation is to look @ Sales Tax, Service Tax, Bank Transaction taxes - These are all considered regressive taxes which charge the same from a poor guy as from a billionaire. Economists always want more in direct taxes than indirect taxes.

Taxes are a vital cog for economic growth. It is horrible for the economy if rich people have too much money. It is always better for 1000 people to have 1000 $ each & spend than for 1 person to have 1M $. In economics, we call in MPC (Marginal propensity to consume), the amount you spend for say every 100 $ which is very high in low income people & this determines the Consumption Function (C) of GDP.

Other than that progressive taxes are natural GDP stabilizers. When you earn a lot more or less suddenly, you either go to a higher or lower tax slab & the govt sucks more money or takes less money from you - They prevent overheating or crash of the economy suddenly. That with SS, Food stamps, etc are GDP Stabilizers.

Significant economic research has gone into this. Another thing is is that the money people earn is because of being born in some country & family, access to a strong economic market, access to education/financial markets to borrow, a supportive government, social safety nets & so on. 2 brothers with identical environments may have very different success rate but more often not, our wealth id to quite a significant amount determined by our birth !
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