While taxes are often seen as a hassle, they serve as the backbone for the economy of any given nation. Taxes serve to fund the building of infrastructure, education institutes, as well as the healthcare sector. The economy is healthy as long as there is a fair and effective taxation system alongside responsible citizens who make use of the public services and education provided to them.
Taxes are a compulsory contribution by citizens and corporations to the government. Taxes are often seen under income tax, goods and services tax, property tax, excise duties and even corporate tax. Be it a salaried employee and a small business or even a multinational company, everyone in the economy needs to contribute in the form of taxes to ensure the economy remains functional.
How Taxes Fund Public Services
Taxes serve to provide the government the money to fund public services. A few of these services are as followed:
- Health care systems
- Education
- Public infrastructure
- Law and order
- Welfare programs
Without the collection of taxes, the government would struggle to provide any of these services, especially to low income citizens.
Economic Stability and Wealth Distribution
A taxation framework is useful in managing and redistributing wealth within a given state. Governments are able to close the income gap by taxing higher incomes at a higher rate as well as subsidizing services that everyone can access. Lower income access to support services is a necessity as it not only improves productivity but increases the economic output for the nation. Governments are able to manage inflation and recession periods with the help of taxes. Governments are able to manage inflation and stimulate job creation through tax funded infrastructure spending, thus driving up demand.
Wrapping Up
Taxes are not only legal requirements but civic obligations that help maintain the economy’s ecosystem. A healthy economy requires a healthy environment which can be funded through taxation directed to education, infrastructure, innovation, and the health sector.
A society that is post economic is able to enjoy a positive and well-balanced normal life as they strive towards a safe, secure and flourishing state that is a collective destination for everyone with the help of investment in taxes.