Importance of Taxation in Society

Introduction
What is taxation? Taxation is a requirement in all countries. It is a method to provide the society with the necessities needed. Hence it combines all efforts from the full society for public goods. Franklim D. Roosevelt once said “Taxes, after all, are dues that we pay for the privileges of membership in an organized society”. Which makes people wonder of the importance of taxation in a sociey, roles of taxation, fairness of taxation, and a new method of tax green tax.
Importance of Taxation in a society.

Taxation was introduced in the 19th century and exists to this very day. It is an economic verity that governments need revenue in order to finance their activities and their spending programs for the society and the country itself. A nation requires combined effort from all members of the society for the publics good; for example ', building roads, ports and other necessities; the only practical method is through some form of taxation. In addition it is important for individuals to know that the government is not able to operate and function properly or provide the essentials to the public without the collection of taxes from the public. Since taxes is the most effective way of raising the revenue. Now, moving towards the benefits and needs of taxation in every economy as to why taxation is really important in societies. Governments carry out many functions and run their spending programs in order to provide the society with the necessary requirements provided by the taxation money collected from the society itself; Firstly taking a look at economic infrastructure, things that are jointly soughed after, such as roads, hospitals, enforcement of contracts, police and armed forces for protection. Secondly, they use it for the functioning of the government itself, social engineering and public works. Thirdly, governments spend on war expenses, property protection, public order and implementation of law in the country. The government also funds public and welfare services which include education system services, pensions for the elderly, health care system services, benefits for the unemployed and transportation services for the public. Other public benefits such as water, waste management systems and energy. According to the view of political philosophies that taxes are vindicated since they fund government activities that are beneficial and required to the society. Taxation in modern nations have the advantage of social development and the majority of population. A similar presentation quoting from Oliver Wendell Holmes, Jr is "Taxes are the price of civilization". So basically, taxation is vital and plays a prominent role in developing countries for the advanced well-being of their residents and public expenditure.

Roles of Taxation:

In an economic perspective taxation is used by the government for three things efficiency, equity and stabilization. In Efficiency, taxation is used in order to reduce in completion alteration and ease matters in an incomplete market. The value of goods is provided by the taxes in equity and lastly, stabilization, taxation manages the risk that individuals face and stabilizes the macroeconomic.
Taxation is used in many different ways. There are seven roles mentioned by Waidyasekera (2007) and they are: 1. In most countries around the world taxes are enforced and collected by the government. Taxes are collected from governments to be used as public expenditure. For instance: roads and road lights are fixtures that is built and paid by the government from the payment of taxes. The main purpose is to create a strategy to develop the taxation policy and the reason after it is for the government to collect revenue and put it in public use.

2. All countries have wealth and income; these incomes come from collecting taxes and using different types of taxes to redistribute between wealth and income. A definition of income is stated by Singhania and Singhania (2009), "As generally understood - Income is a periodical monetary return with some sort of regularity. It may be recurring in nature." It 's also defined as the increase in wealth that a person gets in a fixed period of time.

3. Tax is enforced everywhere, for instance even while buying food or cloths there are taxes that go to government indirectly for public expenditure and some taxes that are for the shop.

4. Taxation has a system that is used in different part of resources so that it can be influenced and achieve economic goals. Governments give public investment programs money so it can buy expenditure for the public from pivate sectores. It also uses taxes to invest in foreign investment to result benefits from it.

5. Private sectors borrow money from the government for the purpose of economic development and this helps to increase their savings and capital. Also when they try to increase the investment in the recourses they want it increases the capital and savings.

6. Examples of different types of taxation are excise, import duties and turnover taxes/VAT. These are used by companies to protect themselves from other international companies that might be their compition. There are different taxes used in goods which are produced locally and goods that are imported, different rates of tax and also other methods of taxation may vary.

7. "To stabilise national income by using taxation as an instrument of demand management." (Waidyasekera, 2007) This means that taxation is used to get income for the country and these incomes are used by the government to develop the country in ways that they see fit, for instance, making roads, public education and building hospitals. How fair is taxation in current society Gordon Brown in the Financial Statement and Budget Report (FSBR) in July 1997 stated that tax implementation in the British society is based on an understandable and clear policy kept for the society. Tax payments are fair enough as it applies on everyone in the United Kingdom and it motivates people to work, invest and save money fairly. These principles are assumed to be fair enough because everyone pays the required amoun of tax. When discussing taxation and how beneficial it is to the society, the government is most likely to be the benefited party, but when we come to reality the people are also benefited from these tax paid to government. The society will be able to live in a better environment by paying tax. The government will supply the society a better life environment and also better developments.
The government takes taxes from people in order to provide them with a better life phase in the future; this is the philosophy of taxation in the government point of view. Health, education, environment and public goods cannot be achieved without the support of the whole society. By tax the government will be able to raise revenues that will help in serving the public. If the government gave the chance for each individual to help or pay money to people who need financial, and health support, few would probably pay sufficient amount of money but the rest would reject to pay anything to the needy. This argument is the best reason to state why is tax fair enough for the society from the government’s point of view.
On the other hand economists argued that spending on the government by paying monthly tax rates could affect on the economy by the individual by influencing the employment rate, imports and exports and inflation. It also can direct economic behavior and discourage consumer spending and it can have a great impact on the country 's economy.
By comparing the economists and governments point of view the implementation of tax is necessary to enhance the financial support in the society and also some of the other vital supports that the government serves the society with. But if economically speaking, maybe if an individual cannot pay tax the tax avoidance rules can be practiced in return.
Tax avoidance rules are legally accepted and kept to support people who cannot pay the percentage of tax enfrorced. The government exempts tax if an individual invests in government places, by investing in the government both individual and government will be benefited and tax could be exempt.

Green tax theory
Green tax was introduced in 1996, and increasingly became popular between all main political parties. It aims to centralize some of the costs that could damage the environment, also to influence consumers to take green decisions and to avoid products that could cause future environmental problems. Green tax’s goal is to implicate products and services that will make people to take decisions and options that are more environmental friendly. Moreover it wants consumers to take the option of green products that are less attractive and less money consuming than non-green product and services that are highly costly. Products and services that are involved in making the world a more green enhanced for instance in cars and air travel thereby they are trying to reduce carbon dioxide emissions. Green taxes pressurize the public to be more responsible and environmentally sustainable. The issue that caused UK’s treasury to acknowledge green taxes is climate change and the importance of trying to reduce damages that will cause future climate changes.

Types of green tax
There are a several types of green tax. Under the office of national statistics states that there are six types of environmental taxes collected. * fuel duty, * vehicle excise duty, * air passenger duty, * landfill tax, * climate change levy, * Aggregate levy.

Fuel and vehicle taxes

Most environmental taxes come from fuel duty, and vehicle excise duty. Environmental revenues didn’t start as green taxes since vehicle taxes were introduced by 1888. In 1993 the government introduced ‘fuel duty escalator’ policy that states fuel prices to rise every year by the rate of inflation. Through the years the government has been finding ways to support environmental concerns of fuel, and hydrocarbon oils. Thereby they have used biofuels that is a cleaner version of hydrocarbon oils. A policy was amended in 2001 based on vehicle’s carbon emissions the rate of duty will be charged.

Air passenger Duty

United Kingdom one of the European countries that take revenue tax on domestic and international passengers, the tax ranges from £10 to £80 per passenger.

Landfill and aggregates

Environmentalist’s goal is to discourage landfill; on 1 October 1996 landfill tax was forced; encouraging waste management, such as recycling. Landfill is taxed at £40 per tonne for active waste. This method is goal to avoid and minimize damages to the environment and human health that are caused by landfill waste.
Aggregate levy rate is initially £1.95 per tonne from 1 April 2008 that is applied to commercial exploitation of aggregate. Negative effects on the environment were acknowledged by the government, such as, dust pollution, bio diversity.
Greening of other taxes

Environmental taxes have become more of an environmental responsible fashion that taxpayers pay because of being rewarded for green behavior. Unintendedly environment taxes impact other types of taxes for example inheritance tax, it impacts in for instance by rationally economizing, homeowners in downsizing and remain in family homes. The government setting policies have difficulties in balancing policy makers to consider economic policy vicissitudes and environmental transformations on any tax.
Environmental Effects
In 2007 environmental tax revenues were almost £38 billion, approximately 7.4% of total tax revenue.
United Kingdom government proclaims that climate change levy has a huge impact in reducing emissions. It is stated that it will save over 3.5 million tonnes of carbon by 2010. Reducing landfill deposits claimed by the government will result a saving of 0.2 Mtc by 2010. It is expected that landfill tax revenue will increase up to £160m. Recycling projects that were funded by the government led to an improvement in the recycling performance, households recycled or composted 34% of waste in 2007-08. Hence it shows good measures of landfill tax that has a positive environmental effect. Green taxes have been successful for instance private motorists have reduced because of the price of fuel.
Businesses have challenges around taxes since the cost have risen. For instance the cost of electricity, climate change levies, and petrol prices have risen since the taxes have been implied. Hence businesses try to cut costs. The more companies start getting involved in improving their environmental profile and social responsibility will lead to a better future because of environmental responsibilities have increasingly become important forthcoming.

Conclusion

Without taxation advancement of a country and providing citizens with their needs would not be able to come true. The only way of collecting money to satisfy the poor and rich is by taxation. Tax is beneficial to all members in any class of a society. It also has plenty of roles that make societies more civilized. Taxes are equal to all people in a society not discriminating with exemptions to the needy. Lead enviornmental tax to introducing green tax because of eviornmental problems that could be caused to in the future.

References: http://www.greentaxreport.co.uk/read-chapters-online/12-green-taxes-in-operation References 1. Tax/Spending Burden, Forbes magazine, 05-24-04 2. McCluskey, William J; Franzsen, Riël C. D (2005). Land Value Taxation: An Applied Analysis, William J. McCluskey, Riël C. D. Franzsen. Books.google.com. ISBN 9780754614906. http://books.google.com/?id=jkogP2U4k0AC&pg=PA73&lpg=PA73&dq=disadvantages+of+land+value+taxation. Retrieved 2009-03-27. 3. The OECD Classification of Taxes and Interpretative Guide, Organisation for Economic Co-operation and Development, 2004 26 USC 877.

References: 1. Tax/Spending Burden, Forbes magazine, 05-24-04 2. McCluskey, William J; Franzsen, Riël C. D (2005). Land Value Taxation: An Applied Analysis, William J. McCluskey, Riël C. D. Franzsen. Books.google.com. ISBN 9780754614906. http://books.google.com/?id=jkogP2U4k0AC&pg=PA73&lpg=PA73&dq=disadvantages+of+land+value+taxation. Retrieved 2009-03-27. 3. The OECD Classification of Taxes and Interpretative Guide, Organisation for Economic Co-operation and Development, 2004 26 USC 877.