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Tax

The money needed to pay for government. From time immemorial taxes have been unpopular.

In the 20th century taxes have risen as a proportion of GNP as the functions of government have increased.

In western countries they rose especially high to pay for war: the two world wars and the Cold War.

Since the end of the Cold War western citizens seem very unwilling to pay taxes (perhaps realising that the money had been wasted) and all governments have been forced to reduce taxes.

However, although personal taxes get the most attention, Corporate taxes are also falling as transnational corporations bargain their rates down by threatening to locate in other countries or by switching the money around so that national taxmen can't find it. Thus although the economies have grown hugely governments find it hard to extract money from the corporations which spend huge sums of money in electing those who will keep their taxes low - the main source of electoral corruption.

Those countries where the government gets its main income from oil often have no taxes on the people, and therefore have no need to consult the people. Thus they tend to be dictatorships. Examples include: Nigeria, Saudi Arabia, Equatorial Guinea.

Those countries where the government fails to collect taxes end up without effective government. Sierra Leone is a good example. Corrupt officials took bribes from the main taxpayers (mineral extraction companies), and soon did not have any money to pay the police and army and the state collapsed into civil war.

Last revised 8/10/09


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