Taxes are what we pay to our governing body to cover the cost of the provision of common services, common that is to everyone one who comes under the control of that governing body to some extent (in some cases that includes visitors who don’t necessarily pay taxes for services they receive when visiting) .

To make that less general, say you live in a city and there is an elected group (the city counsel) that oversees the cities operation.  That is the governing body.  You pay them to provide and manage the common services for the people living in the city (everyone under the control of that city council).    In this case common services are things like police, recreation centers, parks, etc.

In reality most people are aligned with a number of governing bodies (e.g., cities, provinces, countries)and pay taxes to each in a number of ways and receive different services from each (in some cases overlapping services).

Are Taxes Fair?

If everyone received the same level of service and paid the same amount taxes you could argue this was fair.

However, you could also argue individuals with more resources (i.e., money) should pay more and support the services they use as well as some of the services those with less money use.  This kind of pay what you can afford thinking has a number of supporters who argue it is fairer than equal distribution of cost and usage.

There probably are those who argue the “you should only get what you pay for” approach as being the fairest.  That is if the park cost $100 to build and there are 10 residents they all pay $10 taxes and get to use the park exclusively 10% of the time.   England briefly tried a variation on this approach with a poll or head tax – every man women and child paid the same basic tax.  (no surprise this did not work out well)

And reality strikes home!

Of course in the societies which we live it is not practical to match cost to service received and this is even more complicated by the multiple government jurisdictions we generally support.   So we practice the principle that those who earn more pay a higher percentage of the taxes (theoretically if you earn more you can afford to pay more).

Say you go to out to a restaurant for dinner with your parents.  If your parents pay the bill you get a free meal, odds are though they wanted to pay for you.  I will assume they can afford it and probably wanted to cover your meal cost to help as you have less resources than they do (not because of ability but rather probably due to age, experience and opportunity). They know if the situation was reversed you would pay.

I am not sure those that pay a higher percent of the tax bill giving others a “free meal” want to do it, but the concepts do have some parallels.

And the usual disclaimer and caution

Effective societies operate on the principles of collaboration and charity, not equality (one of the key reasons communism does not work .   The key consideration though is balance.  That is everyone is equal probably does not work but nor does overtaxing those with more resources.  The tax scenario works best if balanced for all parties.

A parting thought (and great book for you to read if you have not already done so)  in the book “Atlas Shrugged” author Ayn Rand creates a world where the differences before those that can and do and those that do not is exaggerated.  Basically balance does not exist those that cannot feed off of those that can.  Those that can succeed drop out of the society, no longer supporting the government (they had enough because the balance was off) and the result – I won’t give away the ending of the book but you can probably guess.