Taxes. They are often described as a necessary evil. Certainly when April 15 rolls around, you will likely see them as an “evil.” But are they really necessary? When did the concept of taxation begin, and do we really need them?
Taxes in one form or another have existed throughout recorded history. Biblically, there is a reference to taxation when Jesus admonishes the Jews to “render unto Caesar the things which are Caesar’s, and unto God the things that are God’s” when they asked if it was lawful to pay taxes or tribute to Caesar, an earthly authority. So taxes have been with us for millennia. The Egyptians taxed oil, a commodity. Greeks taxed foreigners–a practice not far different from modern cities imposing hotel or lodging taxes. And one could say that the Roman emperors never saw a tax they did not like. If it could be taxed, they did.
Further, resistance to taxation has been inherent in human nature as long as the existence of taxes. This is obvious in the Jews’ question to Jesus when they challenged the validity of paying Caesar’s taxes. This resistance often turned ugly, too. Circa 6 A.D., Judas of Galilee led a revolt when the Romans instituted a poll tax in Iudaea.
Why, then, did taxation originate? What is its purpose? What makes taxes “necessary,” and why does the public so often rebel against this necessary evil?
Modern thought–also reflected in the philosophy of previous ages, is that government’s role is to provide for its citizenry those services and necessities they cannot provide themselves. In the case of the Romans, they needed a strong military to protect themselves from invaders and to finance the expansion of the Roman Empire. The former is certainly within the role of the government, as individuals really cannot defend themselves against outside forces. The latter depends on the point of view of the parties involved.
What are other essential services the government should provide? Some primary needs are a constabulary or police force; a fire department; public water and sewage works; public schools. However, the list continues to grow as sociological issues become more complex. For example, should the government provide day care or after-school programs? Essentially the parents’ responsibility, many parents cannot afford these programs. How about homeless shelters? Pragmatically, if cities do not provide shelters for the homeless, they will establish themselves in locations where others may not want them (e.g., library or park benches, business doorways, etc.).
Following the idea that government should help those least able to help themselves, most governments provide other forms of public assistance or welfare. The theory is that the recipient will be given enough money to help him or herself until they become self-supporting. Unfortunately, many of these people learn to work the system (such as “welfare mothers” who produce more children to get more money). The point they miss, however, is that the government does not have any money until it takes that money from others in the form of taxes. Therefore, its largess is borne by a tolerant electorate that expects a fair usage of its contribution.
When that usage or distribution is perceived as unfair–when Joe or Jane Taxpayer see abuses in the system, that is when tax revolts begin. Most American school children know that one sounding cry of the Revolutionary War was “no taxation without representation.” The British government kept assessing more severe taxes upon the colonists without their American cousins getting a voice in what would be taxed and to what extent. Much of the reason was that the British had been at war with the French for years and could not squeeze enough money from their own countrymen to fight anymore; thus, they looked for another source of revenue and found it across the Atlantic Ocean. The Americans, however, not seeing a tangible benefit for themselves, revolted and established their own independent nation.
Taxpayers want honesty from their governments. When they feel defrauded by that government, they will challenge it. This is the situation that has been developing recently in America with the introduction of the concept “too big to fail.” The government decided that certain banks, institutions, and businesses were too big to fail–that their demise would send lethal shockwaves through the economy. That is why it instituted TARP–the Troubled Asset Relief Program. American taxpayers ponied up hundreds of billions of dollars to save these companies; however, much of that money went to CEOs, often in the form of huge bonus checks. This while the unemployment figures precipitously rose. At this point, the public started questioning the use of its hard-earned dollars. Obviously, multi-millionaires do not come under the heading of “those least able to take care of themselves.”
Finally, while there is a concern that the more the government provides, the less the individual is motivated to do for him or herself (a “nursemaid” government), there is also a question of the legitimacy of many taxes. For example, politicians often discuss “sin taxes.” These are imposed on products that society, in general, sees as detrimental to the well-being of its citizens when used excessively or at all. Some of these products are cigarettes and liquor. However, rather than enact prohibition (probably a losing gambit), the government often sees a cash cow. Raising the tax on cigarettes by only one or two cents creates billions more dollars for the government’s coffers. In the discussion of legalizing marijuana, many politicians suggest that the tax revenues from this drug could help to balance the budget. But should government growth be subsidized by-products that deplete the physical, psychological, or emotional fabric of society?
Yes, taxes in some form or another are necessary. Individuals cannot afford to provide for all their needs. And many of the services the government provides through our tax dollars, while they may exceed the scope of “basic” needs, enhance the quality of our lives–libraries, community centers, etc. Therefore, while it may be painful to pay those taxes, the average person reaps a greater return than they would without this investment. All they ask in return is that the government be a fair and wise steward of their money.