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Tax Tyranny

Pascal Salin

Tax Tyranny does not aim to give a description of existing tax systems, rather it provides readers with the intellectual instruments which enable them to understand the role of taxation in the workings of economic systems and to evaluate the fairness of taxes.
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Chapter 11: Taxes for which state?

Pascal Salin

Extract

Taxes exist to finance public expenditures. Therefore, in order to evaluate a tax system it may be useful to add an evaluation of public expenditures. There is a traditional distinction of state functions, namely the allocation, redistribution, and stabilization of resources. But these supposed roles of a state are debatable: There are no resources to allocate, redistribute, or stabilize since resources are created by individuals and belong legitimately to them, and states get resources by using coercion. There is, however, a justification of state interventionism, namely the existence of “public goods”, which are goods and services desired by all citizens and which would not exist without state activities (for instance national defense). But most state activities in reality do not correspond to this definition. Moreover, if it was true that states produce “public goods” they should not fear the competition of private producers; in fact they impose public monopolies by coercion, and if a good or a service is thus produced only by a state it is wrongly called a “public good”.

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