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People resent paying tax, particularly if they disagree with some aspect of how the money will be spent. An example of this is defence spending, where pacifists argue that the money should not be spent – but everyone in the country receives a share of the defence service, whether they want it or not, and it is not possible to exclude certain households from being defended. Opting out from particular taxes is impractical for several reasons:
· The government spend cannot necessarily decrease by a corresponding amount.
· There would be an increase in the cost of administration.
· Everybody else would have to pay more.
In practice taxation has to be levied across the whole of a society, although there may be scope for changing the subsidiarity of tax collection so that more decisions can be taken locally (3.4.5).
For any desired level of government spending, the tax has to come from somewhere. The choice of what to tax is partly an economic matter – whatever does least damage to the economy – and partly political: taking account of the unpopularity of the tax and taking account of its relative impact on rich and poor people.
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