Taxation

Watch

• Do tax cuts stimulate the economy? - Jonathan Smith ↗TED-Ed
• How the rich avoid paying taxes ↗Vox
• Why Sweden is proud to have the world's highest taxes - BBC REEL ↗BBC Global
• Erasing Taxes For the Rich Is the Hottest Business on Wall Street ↗Bloomberg Television
• How Amazon Paid $0 Federal Income Tax in 2018 ↗CNBC
• How Sweden Balances High Taxes And Growth ↗CNBC

Read

• The Wealth of Nations ↗For a foundational understanding of taxation's historical principles and its role in statecraft, Smith's enduring insights remain indispensable.Adam Smith
• Taxing Ourselves: A Citizen's Guide to the Debate over Taxes ↗An accessible yet rigorous primer on the complexities of tax policy, demystifying the debates for the discerning citizen.Joel Slemrod and Jon Bakija
• Public Finance in Theory and Practice ↗The definitive textbook for a comprehensive grasp of public finance, offering a robust framework for understanding taxation's economic implications.Richard A. Musgrave and Peggy B. Musgrave
• The Incidence of the Corporation Income TaxA seminal analysis that reshaped understanding of who truly bears the burden of corporate taxation, a perennial policy puzzle.Arnold C. Harberger
• An Exploration in the Theory of Optimum Income TaxationThe foundational exposition of optimal income tax theory, offering a rigorous framework for balancing equity and efficiency in tax design.James A. Mirrlees

Voices to follow

• Thomas Piketty ↗His seminal work on wealth and income inequality has profoundly reshaped debates on progressive taxation and capital levies.Economist, École des Hautes Études en Sciences Sociales (EHESS)
• Emmanuel Saez ↗A leading voice on optimal tax theory, his research provides empirical insights into how tax policies affect income distribution and economic behaviour.Economist, University of California, Berkeley
• Gabriel Zucman ↗His rigorous quantification of global tax evasion and the mechanisms of wealth hiding has been instrumental in advocating for international tax reforms.Economist, University of California, Berkeley
• N. Gregory Mankiw ↗Offers a prominent mainstream economic perspective on tax policy, often emphasizing efficiency and the trade-offs inherent in various fiscal approaches.Economist, Harvard University

Glossary

• Direct TaxA tax that you pay directly to the government, meaning the burden of the tax cannot be easily passed on to someone else. For example, Income Tax is a direct tax because the person earning the income is the one who must pay it.
• Government SpendingThe money that the government uses from taxes to pay for things that benefit everyone, like building roads, running schools, and providing healthcare. These are often called public services. For example, the money collected from taxes helps build new bridges and pay teachers' salaries.
• GST (Goods and Services Tax)A tax added to the price of most goods and services you buy. It's collected by the seller when you make a purchase and then paid by the seller to the government. For example, when you buy a pizza, the bill usually includes GST, which is an extra charge on top of the pizza's base price.
• Income TaxA tax that individuals and companies pay on the money they earn, such as salaries, business profits, or rental income. For example, if your parent earns a salary, a portion of that salary is regularly deducted and paid as income tax.
• Indirect TaxA tax that is included in the price of goods and services, so you pay it when you buy something, and the seller then passes it to the government. The burden of this tax can be shifted. For example, GST is an indirect tax because it's added to the price of items you buy, and you pay it without directly sending money to the government yourself.
• RevenueThe total amount of money that the government collects, mainly from taxes and other fees. This money is then used for government spending. For example, all the money the Indian government collects from Income Tax, GST, and other sources combined makes up its total revenue.
• TaxA mandatory payment that people and businesses make to the government. This money helps fund public services and government activities. For example, when you buy a new phone, a part of the price goes to the government as tax.
• Tax DeductionCertain expenses or investments that you can subtract from your total income before calculating your income tax. This helps reduce the amount of tax you have to pay. For example, if your parents invest in certain savings schemes or pay for specific health insurance, they might be able to claim a tax deduction, lowering their taxable income.
• Tax EvasionIllegally avoiding paying taxes that you are legally required to pay. This is against the law and can lead to serious penalties. For example, if a shop owner sells goods but doesn't report all their sales to the government to avoid paying GST, that's tax evasion.
• TaxpayerAny person or business that is required by law to pay taxes to the government. For example, your parents are taxpayers because they pay income tax on their earnings.

Threads 5

Where this connects to other fields, and why it's worth knowing.

• Cartography and Map Design Geography

  The first super-accurate national maps weren't made for travelers, they were made to collect taxes. Governments mapped every single field so they could measure it and charge the owner. A ruler had to make the land readable before it could squeeze money out of it.

• Writing Systems Literature

  Writing wasn't born to tell stories, it was born to tax. The oldest cuneiform tablets are lists of grain and cattle the state wanted to count and collect. So writing itself started as a tool for the government to track what it could take.

• Cognitive Biases Psychology

  Taxes get quietly taken from your paycheck before you ever see the money, and that's on purpose. Our brains hate losing money we're holding far more than money we never touched. If people had to write one big tax cheque every April, they'd revolt; the trick is just clever framing.

• Architecture & Urban Design Arts & Design

  Long ago England taxed houses by how many windows they had, so owners bricked up their windows to pay less. A tax literally darkened homes for a century. You can still see the blocked-up windows today, a money rule frozen into the walls of buildings.

• Religious Authority Religion

  Long before governments, churches collected the tithe, a required share of your income. To do it they built the first head counts, payment records, and checked accounts. Later governments basically inherited that whole tax machine from religion.