The Political & Philosophical Reason for Taxes

The purpose of taxation is not merely economic or collecting revenues for the government. Taxation is also a tool for achieving certain political and philosophical objectives.

When individuals and businesses file their taxes, they reveal the details of their assets and income to the government. This information about the distribution of incomes and assets in the society is a major source of the government’s political power. By examining the tax documents filed by various taxpayers, the government can identify the sectors and groups that need to be rewarded for political purposes and those that need to be penalized. Information is power—and the system of taxation is the biggest source of information for the government. In essence, gathering economic intelligence on every individual and every business is the political reason for levying taxes.

The philosophical justification of taxes hinges on the idea that equality is a social value. By taxing the rich and redistributing the wealth among the poor, the government can claim that they are trying to create an equal society. There is no evidence that redistribution of wealth leads to economic growth and social harmony—an equal society might as well be an unachievable utopia. But most intellectuals and politicians in our time take it as a proven fact that equality is by itself a great social value. They insist that building and sustaining an equal society ought to be the government’s primary moral purpose.