The personalized benefit means that these are not, strictly speaking, taxes. These are payments linked to an individual’s labor or business income that confer some entitlement to pensions or other social benefits. Social contributions are a prime example. Importantly, however, many policy instruments that are not in a legal sense taxes have much the same effect. (You may derive some benefit from the public spending your payment helps finance, but if not-well, from the perspective of tax collection-that’s just too bad.) The Organisation for Economic Co-operation and Development defines a tax as a “compulsory, unrequited payment to government.” That is, you have to pay it, and you don’t get anything back-at least not directly. In the March 2015 issue of F&D we will apply them to some current controversies. In this, the first of two articles on taxation, we examine these principles. But the basic principles for understanding and evaluating all taxes are much the same. Nowadays we think of income taxes, value-added taxes, taxes on cigarettes, and the like as the key revenue instruments. Playing cards, urine, fireplaces, slaves, religious minorities, and windows have all at some point attracted the attention of the tax collector. It is hard to think of anything that some government, at some point, has not taxed. Finance & Development, December 2014, Vol.
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