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 D duration
history, stabilization
Historical Differences:
In medieval times, taxes were customarily
paid not in money but in the form of labor or other in-kind payments (such
as work on local roads or supplies of grain or other farm produce). As
long as the government's services consisted largely of military actions
and the provision of roads and other public works, in-kind taxation satisfied
most governmental needs reasonably well. Rulers could levy work crews or
troops by requiring each noble to produce a number of laborers or soldiers
suitable to the noble's rank or estates. In the same manner, grain levies
could be imposed on landowners, both to feed the workers or troops and
to provide for various other government needs. In modern industrial nations,
although taxes are levied in terms of money, the fundamental pattern remains:
The government designates a tax base (such as income, property holdings,
or a given commodity); applies a tax-rate structure to the base; and collects
the tax (equal to the base multiplied by the applicable rate) from the
stipulated legal taxpayer.
Tax systems, even today, are as varied
as the nations that devise them, ranging in complexity from in-kind arrangements
to computerized revenue systems. Simple tax mechanisms are suitable only
to the needs of those governments that are extremely limited in scope.
When government responsibilities are extensive and diverse (as, for example,
when taxes are used to modify economic inequalities and to distribute benefits
in ways that are considered equitable), the supporting system of taxes
must be technologically sophisticated. Elaborate networks of fiscal reporting
become essential, as does a standard of public education adequate to ensure
a high degree of taxpayer compliance.
The stabilization function:
from government economic policy (Britannica)
Stabilization of the economy (e.g.,
full employment, control of inflation, and an equitable balance of payments)
is one of the goals that governments attempt to achieve through manipulation
of fiscal and monetary policies.
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