Taxes are the price we pay for civilization
In economics and public policy, a powerful and often-cited phrase encapsulates the essence of taxation: “Taxes are the price we pay for civilized society.” Attributed to Oliver Wendell Holmes Jr., a former Associate Justice of the United States Supreme Court, this statement profoundly summarizes the role of taxes in our daily lives and the broader context of societal functioning. But what does this mean?
This seems to imply in order not to live under some implicit threat of barbaric chaos, there is some organization out there which, in order not to unleash that chaos, demands that we pay an expensive ransom, the organization is called government or country, we citizens are referred to as tax-payers.
The most direct interpretation of Holmes’s statement relates to how taxes fund essential public services. Education, healthcare, infrastructure, and public safety are just a few examples of the services financed by tax revenues. These components are integral to a functioning society — they educate our youth, heal our sick, connect our cities, and protect our communities. Without adequate funding for these services, the quality of life and the very structure of society would deteriorate.
Taxes are fundamental to the functioning of the government. They finance the legislative, executive, and judicial branches, enabling them to perform their duties effectively. This includes everything from lawmaking and maintaining public order to international diplomacy and defense. Moreover, taxes are the financial backbone that supports the rule of law and democratic governance.
While paying taxes might not always be pleasant, it contributes towards maintaining and developing a society that offers safety, stability, and opportunities. Holmes’s phrase reflects the idea of a social contract, where individuals agree to contribute a portion of their earnings in exchange for the benefits of living in a well-organized, prosperous community. It underscores our collective responsibility to contribute to the public good.
We depend on public services for many of the daily activities that we take for granted. The services that taxes fund make a more civilized life possible, they enhance our well-being in many ways. And taxes have another important health-enhancing function: They help to redistribute wealth and reduce inequality. This enables people who, for a variety of reasons, need assistance and support to lead a healthier life.
