Only two things in life are constant: death and taxes. And while the concept of death and mortality has made many an author and poet a rich man (speaking relative to the average poet of course), very rarely are great works composed about the intrigue and humanity of the modern tax system. Even when the two are combined, never has a prose been eloquently penned regarding the injustice of the Estate tax imposed upon the transfer of property rights whenever a land holder so thoughtlessly expires.
Some may ascribe the lack of interest in standardized methods of taxation as evidence that they are inherently boring systems – not so. The very creation of a tax itself, in which a charge is imposed upon a consumer to acquire a capital pool used to fund other projects, is a fascinating concept: What should be taxed? How high should any given tax be? What should the money, once acquired, be used for? How can this system, seemingly designed to be corrupted, circumvent the inevitable issue of sticky-fingered bureaucratic interests? The answer is, as with all things, both enormously subjective and fiendishly complicated.
The basics: A tax is a levy imposed to gather money to fund public expenditures, and often defined by the fact that not paying this charge is punishable by law. Taxes are often issued by a governing body, typically though not always a legitimate government. Taxes can be either direct (sent directly to a governing body) or indirect (gathered through an intermediary, like paying a 15% levy on groceries purchased at the shops). Taxes can be charged as a flat percentage of the cost of goods purchased, or can vary based upon income levels. Because the money gathered in taxation is typically used to fund projects that contribute value to the community as a whole (maintaining sewage infrastructure, building new roads, building power lines, etc.), almost every governing body imposes taxes of one form or another on a segment of their population.
Taxation gets more complicated with scale: with multiple layers of government each setting their own priorities, explicit systems of taxation are needed to ensure each level of government is able to fund their efforts without too forcefully pillaging the earnings of good folk and giving everyone a headache. Even just focusing on the taxation of goods and services (ignoring property, income and payroll taxes, as well as tariffs), complexity is abound; Value Added Taxes (VAT) creates a system that applies the value of a sales tax (a set rate of X%) to all activities that create value. An example is if a baker imports fruit, bakes it into a pie and resells those pies, the VAT they will need to pay will be everything they have earned in the charging of X% (output tax) minus everything they have already paid (input tax), since the rate of X% was imposed in every step of the process from import tariffs to the purchase of other ingredients to the sale of the pie itself.
Nuances exist: some may prefer a sales tax, which simply imposes a tax on the final sale of retail goods, often excluding core essentials such as food and energy. A sales tax is often divined hand-in-hand with an income tax system, as it can be used to piece together government revenues and provide tax breaks where they may otherwise be required. Taxes for importing goods also vary, as they may consist of excises (an indirect tax directly tied to value, often of luxury items) or tariffs (a simple charge for the movement of goods through a political border).
While these differences may seem trivial, it is in these shades and margins of perpetual grey that economies live and die. Free trade zones are created to circumvent the need for tariffs, while customs unions simply seek to impose the same tariffs and quotas on all the members of cet union. For an image of sheer complexity, look to India, which ranked 157th on the global ease of doing business scale as recently as last year. Central, state and municipal governments not only imposed their own dizzying arrays of charges, but also imposed tariffs to cross state lines that led to production hold-ups that would have sent Taiichi Ohno crawling home on his knees in tears. Until, that is, the Modi administration successfully passed a reform for one simple standardized GST (a form of VAT) that was simpler and taxed firms only on the value directly added to a product as opposed to the entire value of the good. The simple act of simplifying the tax code is estimated to boost national growth by 1-2%, and will serve to centralize fiscal policy within India, no small feat when looking to the land of bold colours and bolder castes.
So while there are few odes towards the beauty and bounty of the modern tax system, fret not: it is not the fault of taxes that we all must pay them anymore than it is the fault of death that we must die. Instead, aim to gaze in awe and wonderment at the complexity of modern tax systems and their capacity to fuel or hinder economic growth. And if you focus just hard enough, you may even forget that the interest they ask for has little to anything to do with whether or not the topic interests you at all.