This English word comes from Latin Taxo, "I estimate". Taxing consists in imposing a financial charge upon someone. Not paying is usually punishable by law. They can be classified in direct taxes (a fee imposed directly on a person and collected by a higher authority) or indirect taxes (imposed on goods or services and ultimately paid by consumers, most of the time without them realizing so). Objectives of taxation The first objective taxation should fulfill is to drive human development by providing health, education and social security. This objective is also the very key for a stable, successful economy. A second goal, and a consequence of the first, is to reduce poverty and inequality. Usually, people earning more are proportionally taxed more as well.
The third goal is linked to the second, and it is called "re-pricing". This means taxes are used as incentives to manufacturers, thus reducing the price of expensive products and contributing to social equality. This also works the opposite way: for instance, pricing tobacco to limit health damage. The fourth goal, and also very important, is the strengthening of political groups and minorities. This element is more pronounced when citizens contribute through direct taxes.
Governments, taxes and corruption given these objects, it is to wonder if this money is well spent. Unfortunately, tax regulations are very complicated. Due to this opaque structure, it is very easy to either steal the money of contributors or to spend it on useless investments. This not only hurts the second objective of taxation (to reduce poverty and inequality in society), but also discourages taxpayers to contribute as well; in the U.S., for instance, the volume of unpaid taxes was of approximately $ 250 billion in 2001 (considering payments done by law enforcement). How can well-planned taxes improve the world?
-Agriculture
One of the things well-distributed taxes might do and that's been one of the biggest concerns of the world, is to fight hunger. In 2009, there were one over one billion people suffering from starvation. If underdeveloped countries redistribute these resources, they can support agriculture in small areas, as well as researching new methods to improve productivity; credit can also be loaned to the poorest families and small businesses.
-Education
Around 75 million children should be attending primary school, but are not doing so; almost all of them are poor. In order to make them attend school, a major public investment is required. In Sub-Saharan Africa, for instance, public money will be used to create 3.8 million posts. What could poorly-planned taxes do? Prejudice - Just as well-planned taxes can help to reduce inequality, regressive taxes (that charge less money as a person generates more income), can have the very opposite effect. Income taxes, for example, can discriminate people based on gender, citizenship, civil status, and many other factors.
-Unfair competition
Sometimes, when tax incentives are created, they set an uneven competition territory where both international and national companies compete: for instance, if many incentives are given to a multinational company, this may discourage local entrepreneurship. It is true that, for most people, taxes are a sign of a giant debt in the bank. However, if properly planned, they can mean a social contract, and a way to construct a better world. To ensure they work, people have to watch over their leaders, thus exerting their true power and creating, therefore, a better world.
