Taxes: Punishment, Shared Burden, or Cause-and-Effect?

Awesome! Hugh just posed a question that gets to the very fundamental notion of people's idea of what a 'tax' even is, or what it should be. And it's something you could debate for a long time.

I'll cut to the chase: generally, my philosophy about taxes is that it should simply be a shared burden - based not so much on behavior but simply on ability to pay. The premise being, that there are some things that we simply have to have done and have a way to pay for.

Once we wade into the thicket of trying to use taxes as a sort of 'punishment' for some unseemly behavior, it gives strength to the whole mentality of thinking of taxes not as a shared burden but as a punishment for people the government hates. Then those against income tax, for example, can shout, "But you're punishing success!" and so on.

When you're talking corporate irresponsibility or malfeasance, I think you should simply rely on fines -- call it what it is, a monetary punishment is a fine. Not a tax. Where you have vast numbers of people affected, then perhaps the vehicle of class-action lawsuits is the best avenue.

I can see some cases for specific taxes being related to cause-and-effect rather than 'punishment' as such. For example, roads and gas taxes. One can make a case for funding some defense through gas taxes if we're fighting most of our wars to keep the oil-producing regions of the world safe, but it's harder when you get to second-order arguments like that.

I can see having fines structured progressively like you would a tax, simply to ensure that they would have the desired effect: a $10,000 fine that is steep for a small company but almost non-existent to a large one is utterly ineffective at its intended purpose. So you can make it proportional to profits, or to sales, or to event impact, but still I'd call it a fine, not a tax.