Concept
Tax
Overview
A tax is a mandatory financial charge or levy imposed on an individual or legal entity by a governmental organization to support government spending and public expenditures collectively or to regulate economic activity through measures designed to mitigate negative externalities. Tax compliance refers to policy actions and individual behavior aimed at ensuring that taxpayers are paying the right amount of tax at the right time and securing the correct tax allowances and tax relief.
In economic terms (circular flow of income), taxation transfers wealth from households or businesses to the government. This affects economic growth and welfare, which can be increased (known as fiscal multiplier) or decreased (known as excess burden of taxation).
Certain countries (usually small in size or population, which results in a smaller infrastructure and social expenditure) function as tax havens by imposing minimal taxes on the personal income of individuals and corporate income. These tax havens attract capital from abroad (particularly from larger economies) while resulting in loss of tax revenues within other non-haven countries (through base erosion and profit shifting).
Overview adapted from Wikipedia (CC BY-SA 4.0; see the article history for authors).
In the original texts
Passages from public-domain books where Tax is discussed.
Nobody will lend his money for less interest to those who exercise the taxed, than to those who exercise the untaxed employments. Taxes upon the revenue arising from stock in all employments, where the government attempts to levy them with any degree of exactness, will, in many cases, fall upon the interest of money. The vingtieme, or twentieth penny, in France, is a tax of the same kind with what is called the land…
Adam Smith, An Inquiry into the Nature and Causes of the Wealth of Nations
names the idea; a chapter is titled for it; states what it is; author linked in the graph; opens on it
The objection to it, in the present state of public morality, is the impossibility of ascertaining the real incomes of the contributors. Notwithstanding, too, what is called the inquisitorial nature of the tax, no amount of inquisitorial power which would be tolerated by a people the most disposed to submit to it could enable the revenue officers to assess the tax from actual knowledge of the circumstances of…
John Stuart Mill, Principles of Political Economy
names the idea; a chapter is titled for it; states what it is; author linked in the graph; opens on it
A tax is sometimes not only farmed for a certain rent, but the farmer has, besides, the monopoly of the commodity taxed. In France, the duties upon tobacco and salt are levied in this manner.
Adam Smith, An Inquiry Into the Nature and Causes of the Wealth of Nations
names the idea; states what it is; author linked in the graph; opens on it
Moreover, the imposition of such a tax frequently will, and always may, expose a country to lose this branch of its trade altogether, or to carry it on with diminished advantage, in consequence of the competition of untaxed exporters from other countries, or of the domestic producers in the country to which it exports. Even on the most selfish principles, therefore, the benefit of such a tax is always extremely…
John Stuart Mill, Essays on some unsettled Questions of Political Economy
names the idea; states what it is; author linked in the graph; opens on it
Contributions levied on the people are two kinds; real, levied on commodities, and personal, paid by the head. Both are called taxes or subsidies: when the people fixes the sum to be paid, it is called subsidy; but when it grants the product of an imposition, it is called a tax. We are told in the Spirit of the Laws that a capitation tax is most suited to slavery, and a real tax most in accordance with liberty.
Jean-Jacques Rousseau, The social contract & discourses
names the idea; states what it is; opens on it
Philosophers who discussed Tax
Related ideas
- French Revolution
- Government
- Gross domestic product
- Public service
- Private property
- Vedas
- John Locke
- Wage labour
- Karl Marx
- Adam Smith
- Social democracy
- Kenya
- Wealth
- American Revolution
- Murray Rothbard
- Non-aggression principle
- Price
- Netherlands
- Natural resource
- Roman Republic
- Scandinavia
- Progressive tax
- Achaemenid Empire
- Right to property
Opposing perspectives
Place in the tradition
Part of Liberalism.