What Is the Purpose of Taxation?

What Is the Purpose of Taxation?

What Is the Purpose of Taxation?

Encyclopaedia Britannica indicates that the primary purpose of taxation is to allow a government to allocate resources as necessary. Typically governments use tax money to support expenses related to building and technology infrastructure, military programs, public safety, environmental protection and education.

Local, state and federal governments also collect tax revenue to stabilize the economy. Collecting taxes ensures the government has a steady stream of revenue to meets its purpose of protecting citizens. Another purpose of taxation is redistribution of wealth, according to Encyclopaedia Britannica. While this purpose is somewhat controversial, it is common in the United States for some amount of tax money to go toward social welfare programs.