Caroline Pellegrin Chapter Two, Question Five

Towards the end of the chapter, Wheelan discussed the topic of the net efficiency of taxes- illuminating the perpetual discussion of whether or not taxes do more harm than good to a population. He notes that economists "tend to favor taxes that are broad, simple and fair." Taxes can be highly valuable and effective at providing incentives that minimize the painful consequences of competition.  But often times this governmental aid through the form of taxes can have negative effects. For instance, if a tax is too high in the eyes of a corportation, they may choose to opt out of the tax entirely and or pursue "underground economy" activity. In this situation, the perceived "good" of the tax may actually be outweighed by the negative consequences. Furthermore, this concept is similarly applied to "MediCare," Social Security, or cash payments to unemployed single women, all of which could arguable discourage an increase in personal savings and encourage idleness. On the other hand governments do need to have a means of gaining income, the most popular option has always been taxation. Tax money, hopefully, will go to increase public benefit (i.e. better public education, law enforcement and road maintenence.) Taxes can also be used to "protect people," for instance a tax on cigarettes will ideally reduce the number of people with lung cancer. Typically, people who aspire to see stronger government involvement support the implementation of taxes, while those who do not oppose futher taxation. I, on the otherhand, don't think I have enough experience or knowledge to make an assertion about how I view taxes.