The purpose of taxes
If there is something that many people hate, it is paying their taxes to the government. If this were voluntary, very few people would pay their taxes to the government. For this reason, a good number of people don’t really see the importance of taxes, but simply see government as this institution that is hell-bent on sucking their every drop of blood until they drop dead. In this article, we’re going to look at the purposes of taxes, so you can be better informed about the role you’re playing by paying your money to the government.
Government revenue source
The first reason corporations have taxes is simply because the government needs money to stay afloat. And although there are a number of governments in the world that rely heavily on other sources of income, such as investments in corporations, etc., income from taxes is one of the most reliable, and it is the one that most governments use for your needs. bills. With this money, they can build roads, schools, employ officials, etc.
Resource Redistribution
The other reason why governments impose taxes on citizens is because these governments want to use taxes in order to redistribute resources. As most people already know, one of the most important principles of taxation is the principle of fairness. In this sense, you will find that the government can get money from the rich and then use it to pay the poor some unemployment benefits.
Economic politics
Lastly, the government can also come up with very good policies just by messing with the tax system. If the government wants to reduce aggregate demand in the economy, it can do so by making sure to tax people a lot to avoid inflation. On the other hand, if the government wants to ensure that there is higher aggregate demand, it can do so by reducing the amount of direct taxes so that taxpayers can have a chance to spend their cash on basic goods.
It is important to note that the purposes that have been mentioned here are not just stand-alone policies. At the end of the day, the different purposes will be able to interact with each other.
