⛓️ TAXES: FROM WHERE THEY COME? ⛓️
There are 6 main ways that states finance themselves (broadly speaking): Taxes and Fees, Bonds and Loans, Grants, Public Enterprises, Privatizations, and Natural Resources. In times of crisis, taxes used to be the best weapon to gain political capital. Politicians promise that the rich pay more to achieve "social justice", citizens believe in it, but in the end capital can easily emigrate and the causes are never satisfied because taxes are only the result of wealth, not the origin.
However, this is not an easy subject. There are many sources where they come from. According to the OECD, these are: Individual, Corporate, Social Security, Property, Consumption and Others. Each country has its allocation. The natural question is... Is there an optimal distribution?
There is not a right answer. Some correlations between Taxes and Development could be distorted by factors such as: number of taxpayers, number of registered companies, properties created, purchasing power to consume, special situations and alternative social security regimes. On the other hand, the analysis could be distorted in the future as Europe (the most developed countries) lacks cheap energy thanks to the war effects.
Finally, the strength of the State is a function of its wealth, but wealth is not only a matter of extraction (taxes), but of generation (investment and the Rule of Law). Each distribution can have pros and cons.... What do you think is the best?
The best analysis is yours!
However, this is not an easy subject. There are many sources where they come from. According to the OECD, these are: Individual, Corporate, Social Security, Property, Consumption and Others. Each country has its allocation. The natural question is... Is there an optimal distribution?
There is not a right answer. Some correlations between Taxes and Development could be distorted by factors such as: number of taxpayers, number of registered companies, properties created, purchasing power to consume, special situations and alternative social security regimes. On the other hand, the analysis could be distorted in the future as Europe (the most developed countries) lacks cheap energy thanks to the war effects.
Finally, the strength of the State is a function of its wealth, but wealth is not only a matter of extraction (taxes), but of generation (investment and the Rule of Law). Each distribution can have pros and cons.... What do you think is the best?
The best analysis is yours!
Copyright: Joel Padilla 2023
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