Taxation as an Instrument of Social Control

Abstract

Since all taxes inevitably produce social and economic changes, the question at issue is not whether taxation should be used as an instrument of social control but how it may be used more intelligently to achieve consciously sought social objectives. The greatest present obstacle to the intelligent use of taxation as an instrument of social control is our lack of knowledge, concerning the incidence and econonmic effects of taxes. Even in the light of our present knowledge, however, it is apparent that certain of our tax policies operate to defeat objectives which we are trying to achieve through public spending. It is also apparent that the intelligent use of taxation as an instrument of social control will be facilitated if we rid ourselves of taxes whose incidence and effects are uncertain and transfer their burden to the personal income tax.