Levels of Taxation

The state, or any of its functional equivalents, has the right to charge or levy a tax to any legal entity. Tax, therefore to define, is any pecuniary load casted upon individuals or property to support the state or the government. Furthermore, taxes are any enforced contribution exacted by the government to carry out many of its functions which includes the expenditures on war, public works, social engineering, national infrastructure, health welfare and public services as well as the proper operation of the government itself.

Generally, taxation procures four of its main purposes namely, revenue, redistribution, repricing and representation. The principal purpose is revenue. Taxes augment the funds for education systems, health concerns and infrastructures (including roads, highways and the likes) as well as with the indirect government functions such as the systems of justice and so on and so forth. Subsequently, redistribution acts further as a purpose of tax. Practically speaking, redistribution is the allocation of wealth from the richest segment of the society to those in the poverty line or even as well below the poverty line.

Repricing, as a third purpose of taxation is primarily carried on to address several externalities in the society, such as the similar way by which tobacco is taxed to cause smoking dissuasion to the broad public. The fourth purpose of tax is representation. Implicationally, representation definitely means the existing bargain between the state ruler and the citizen. The charging of taxes by rulers to citizens and the accountability therein demanded by the citizens from the rulers are part of the bargain, for that reason.

For a particular level of income of any individual therefore, there is an appropriate level of tax that shall be met accordingly and correspondingly with their respective incomes. For individuals earning 25K, 50K, 100K, 500K and 2 million for an instance, regardless of any particular time frame, the amount of tax to be charged to selectively each is relatively proportional to the amount of income each one earns. A higher level of tax rate tends to be juxtaposed with a higher Page # 3 level of income.

Thus any individual earning within the range of 25K is taxed with a significantly lower rate as opposed with a person merited with remuneration higher than 50K. Similarly  applied to different cases of varying levels of income, tax and income tends to materialize a direct proportionality. To better and economically illustrate the relationship of tax and the levels of income, let me use progressive taxes as a term to apply to people with higher disposable incomes, such that a higher percentage of their earnings are taxed higher as well than those with lesser profits.

Conversely to the term progressive tax, the term regressive tax on the other hand  applies to those by which tax rates effectively decreases. Personally, I view this apportioning of tax as seemingly discriminatory for those who earn higher incomes than the rest, for everyone is similarly just constituting to the labour power and production of their respective countries,  but the apportioning of tax is unequally distributed.

But on the other side of the story, I have view this distinct level of taxation as fairly tolerable since the amount of wealth by which every person accumulates and eventually can share or contribute to the government is practically different compared from one and another. There are several people who can do better a living , and consequently, it is just fair to apportion unto them a  higher level of tax to successfully carry out and fulfill the government’s previously mentioned objectives. On the contrary, I do not think it to be positively helpful for the state once an equal distribution of tax is ministered.

Equal here refers to same levels of income, regardless of the financial status of an individual’s income per se. For one, if  a high tax is imposed to those who are not sufficiently earning an appropriate income, just so to indicate the equality in paying taxes as with the high-earners, then those people might just fall categorically into the procession of poverty, and in effect, as more people are constituted into the poverty level of any governance, then the economic state or the progressiveness of such country deteriorates likewise.


“Income Tax” Publication retrieved on 01 Sept 2007 from http://www. law. cornell. edu/wex/index. php/Income_tax#menu_sources Scully  G. , “ Income Taxation”, 1995, Publication retrieved on 01 Sept 2005 from  http://www. fff. org/freedom/0895e. asp