Taxes: What Are They Good For?

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Although people usually do not like taxes, and governments can become so corrupt and misdirected that people revolt against paying taxes at all, most recognize the basic need for some public services, funded by some sort of taxation.

The free market is good at allocating goods and services that producers compete with each other to supply. Things are not allocated well when monopoly disrupts the process. But there are some things, real benefits to the entire community, which cannot be had without monopoly; they are monopolies by their very nature. Consider roads, for example. A highway is generally built along the most direct route available – what incentive is there to build another road to compete with it? If the highway were privately owned, the owner could charge “whatever the traffic would bear” for its use. Rather than award individuals such a huge privilege, most communities build roads collectively, financing them through taxation.

Henry George believed that businesses that are monopolies by nature should be run by the government, not left in private hands. It was George’s conviction that the primary function of government is to secure the rights of its citizens – including labor’s right to the wealth it produces.

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