The views of Adam Smith, William Petty and John Stuart Mill on Taxation
Introduction
Taxation has generated various views from different groups of scholars based on its intense and demanding nature of the subject. Definitely, taxation entails the use of existing state and government laws to impose financial charges upon individuals, which seeks to facilitate equal resource distribution1. As such, taxation usually occurs through the use of monetary terms whereby they are submitted directly or indirectly to the administrative forums. Arguably, taxation occurs as a way in which surplus produce is collected to allow for equitable distribution of already available resources2. Although taxation forms an essential basis for equal resource distributions, various objections to taxation have been postulated based on the facts that it is not deliberate but involves the application of penalties in case of default in the remittance of the taxes. In addition, there is no guarantee that funds emanating for payment of taxes certainly helps in bringing some economic stability involving the wealthy and the underprivileged.
Taxation concepts are constantly applied in the economics field as it involves thorough examination of various economic-related concepts, which ease understanding of the whole concept of taxation and economics at large. Hence forth, this paper seeks to answer the question What are the dominant concepts of taxation and how are these linked to various schools of economic thought? I will address particularly inclusive of those concepts of taxation hypothesized by Adam Smith, Petty William, and John Stuart Mill. John Stuart Mill and Adam Smith utilizes the premises of free markets, as to how the markets can regulate itself without any sort of support from all forms of human interventions. However, understanding of the theories stated calls for succinct understanding of the assumptions applicable to various subsequent theories. To this purpose, taxation forms an essential basis for balancing of available resources amongst the existing population segments.
Beverly, M. Adam Smith and the Search for an Ideal Tax System. An Inquiry into the Nature and
causes of The Wealth of Nations, 2000
There are tremendous increase in the inequalities wealth and income, which undermine the prosperity as well as political liberty. The comparison on current tax systems revel various inconsistencies on issues of tax exception and taxing wages. The article asserts several views by Adam smith on taxation.
Cossa, Luigi. Taxation: Its Principles and methods. Orlando: BiblioBazaar Publishers, 2008
Young, P. Progressive Taxation and Equal Sacrifice. American Economic Review, 1990
In every taxation policy, raging debates take place whereby fairness is the dominant theme. Certainly, with various classes of income earners it is difficult to analyze and conceptualize how to treat these groups on taxes. John Stuart Mill asserts on concepts of equal sacrifice, in this case everyone should suffer equally.
