The function of taxation is to raise money for the functions of government. But leaders have long known that through taxation they can modify the behavior of the ruled. This is know as the social incentive.
For example as a homeowner I get a tax deduction for the interest I pay on a home mortgage. If I rented the home I lived I would get no such break, even though the cost to rent might be exactly the same. Clearly I am being incentivized to buy rather than rent, but for the life of me I cannot figure out why. There has even been a proposal to take away that deduction if you live in the wrong kind of house!
Another example is the cigarette tax. Cigarettes are highly taxed so as to keep people from smoking, yet if this were 100% effective the first function of taxation would be destroyed.
Likewise there is a tax on alcohol for much the same reason.
A democrat lawmaker in New Mexico wants to place additional taxes on Television and video games, obstensively to encourage kids to pay outside and lose weight.
There are taxes to punish you for driving the wrong type of car (and rebates for driving the "right" type)
There is a tax break for giving to charity, but if a family member needs financial help I would pay a gift tax on what I gave him.
There are tax breaks for doctors working were the government wants them too.
There are even taxes designed to discourage working hard. With the graduated income tax the more you earn the higher the tax.
There is even a tax break for filing my taxes in the right way (well not for me, I make too much. There we go punishing hard work again!)
So the question is this? Do you want to be manipulated by government in this way.




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