Tax

==Purposes and effects==

The levying of taxes aims to raise revenue to fund [[government|governing]], to alter prices in order to affect [[demand]], or to regulate some [[Externality|form of cost or benefit]]. States and their functional equivalents throughout history have used the money provided by taxation to carry out many functions. Some of these include expenditures on economic [[infrastructure]] ([[road]]s, [[public transport]]ation, [[sanitation]], [[List of national legal systems|legal systems]], [[public security]], public [[education]], public [[health system]]s), [[military]], scientific [[Research and development|research & development]], [[culture]] and [[the arts]], [[public works]], [[Distribution (economics)|distribution]], [[data collection]] and [[dissemination]], public [[insurance]], and the operation of government itself. A government's ability to raise taxes is called its [[fiscal capacity]].

When [[Government spending|expenditures]] exceed tax [[government revenue|revenue]], a government accumulates [[government debt]]. A portion of taxes may be used to service past debts. Governments also use taxes to fund [[welfare]] and [[public service]]s. These services can include [[education system]]s, [[pension]]s for the [[Old age|elderly]], [[unemployment benefits]], [[transfer payment]]s, [[Subsidy|subsidies]] and [[public transportation]]. [[Electric utility|Energy]], [[water management|water]] and [[waste management]] systems are also common [[Public utility|public utilities]].

According to the proponents of the [[Chartalism|chartalist theory]] of [[money creation]], taxes are not needed for government revenue, as long as the government in question is able to issue [[fiat money]]. According to this view, the purpose of taxation is to maintain the stability of the currency, express public policy regarding the distribution of wealth, subsidizing certain industries or population groups or isolating the costs of certain benefits, such as highways or social security.<ref>{{cite journal |last1=Beardsley|first1=Ruml|title=Taxes for Revenue are Obsolete |journal=American Affairs|volume = VIII|issue = 1|url=http://www.constitution.org/tax/us-ic/cmt/ruml_obsolete.pdf|archive-url=https://web.archive.org/web/20170314025345/http://www.constitution.org/tax/us-ic/cmt/ruml_obsolete.pdf|url-status=dead|archive-date=14 March 2017}}</ref>