THE ECONOMIST'S APPROACH TO TAXATION : SOME INTRODUCTORY NOTES

The purpose of taxation is to make people poorer. This blunt truth, obvious though it is, is often overlooked and often misunderstood. It does not mean that taxation is the only way of making people poorer; indeed, as I shall argue below, inflation is an alternative way. Nor does it mean that a country would be sensible to abandon both all its taxation and all its government expenditure. What it means is that the purpose of taxation is to reduce the claims exerted upon economic resources, to cut down spending.