Maybe the reason it is the financial capital of the entire world is that historically the tax regime let people keep most of the money they earned.

Income tax rates and corporate tax rates were higher during the post-war era than they are now.

Effective tax rates weren't much different, which is what matters.

The effective income tax rate was still on the whole higher for the wealthy in the 20th century. Depending on where you put the percentile cutoff, I’m seeing peak-to-troughs between 5-20%.

And the reason most governments reduced the rate was because economists argued that the higher rate reduces economic activity so much that total tax revenue (collected by the government) is actually higher at the reduced rate. Look up the "Laffer curve".

But taxes don't exist as an income flow, but to give incentives. Taxes exist to reduce economic activity for goods where you want that.

What gives you that impression? I get that they are used that way at times, but the core purpose of taxation is to generate revenue for the government.

Because that's the definition of the term. The other concept is called duties.

No, it's not. One example definition of tax: a charge usually of money collected by the government from people or businesses for public use.

A duty is a type of tax.

I'm not going to keep going back and forth about this, but wanted to let you know you are 100% wrong in case you're not a native English speaker or something.

Please reference any dictionary since you don't believe me.

Ok, that might be the case. But these are the words my dictionary gave me. What do you think are the right words for stuff that e.g. needs to be payed to the government a) to regulate the market or b) to provide an income to the government?

> Ok, that might be the case. But these are the words my dictionary gave me.

Please provide a link to this dictionary.

> What do you think are the right words for stuff that e.g. needs to be payed to the government a) to regulate the market

People generally don't pay the government to regulate the market directly.

If you're talking about payment for permit approvals and things like that, most people would call it a fee.

If you're talking about the taxes associated with certain financial transactions or approval to import an item into the country, those are often called duty.

> b) to provide an income to the government?

Taxes.

> Please provide a link to this dictionary.

    $ apt show dict-freedict-deu-eng 
    Package: dict-freedict-deu-eng
    Version: 2021.01.05-3
    Priority: optional
    Section: text
    Source: freedict
    Maintainer: Sebastian Humenda <shumenda@gmx.de>
    Installed-Size: 25.3 MB
    Provides: dictd-dictionary
    Suggests: dictd | dicod, dict | kdict | gnome-dictionary | goldendict
    Homepage: https://freedict.org/
    Tag: culture::TODO, culture::german, made-of::dictionary, role::app-data,
     role::program, use::converting
    Download-Size: 17.7 MB
    APT-Manual-Installed: yes
    APT-Sources: http://deb.debian.org/debian bullseye/main amd64 Packages
    Description: German-English dictionary for the dict server/client
     This is the German-English dictionary from the FreeDict project. It contains
     463244 headwords (FreeDict status: stable). It can be either used with the
     dictd server and a dict client or with GoldenDict.

I thought "taxes" is the English equivalent to the German "Steuern". A "Steuer" is definitely a thing to regulate inefficiencies due to external costs.

> People generally don't pay the government to regulate the market directly.

Huh, that's basic government behaviour. How do you call the mechanism of the government imposing money to pay to the state in order to internalize external costs?

Alcohol causes sickness -> tax on Alcohol, cigarettes -> tax on cigarettes, car usage wears roads down -> tax on fuel, car usage causes congestion -> fees for car usage, CO2 causes climate change -> tax on CO2, income causes wealth imbalance -> tax on income, land ownership causes inefficient land usage -> tax on land ownership, high frequency trading causes energy waste -> tax on high frequency trade, foreign products cause local unemployment -> tariffs, ... . The list is endless, because it includes every "tax".

At least that's what they told me in basic economics class. But then again I'm maybe mistranslating "Steuern". The German term for b) is called "Abgaben" which I thought would mean "duties".

> I thought "taxes" is the English equivalent to the German "Steuern". A "Steuer" is definitely a thing to regulate inefficiencies due to external costs.

They are equivalent, but your English description of the definition of Steuern is not accurate, so I'm not sure what to tell you.

Your English is good enough that I wasn't 100% sure you weren't a native speaker, but there are a number of misunderstandings in the rest of your post that I don't think I'm going to be able to explain.

You're also just inventing reasons for taxes in many cases, rather than just accepting the government sees them as activities that create an opportunity to collect revenue.

Seams like I'm wrong about the general term, which is weird since they tell that definition in several courses in my university. Part of the confusion is maybe that "Steuern" literally means "steerings".

I've found the term that I'm looking for: https://en.wikipedia.org/wiki/Steering_tax . It's a bit weird, that most examples there seem to be from Germany or Switzerland. Maybe we just like that concept. But Piguo was a Brit: https://en.wikipedia.org/wiki/Pigouvian_tax

> but there are a number of misunderstandings in the rest of your post that I don't think I'm going to be able to explain.

Too bad.

> You're also just inventing reasons for taxes in many cases

Most of these are also listed as examples in the Wikipedia articles, the other are very much the official reasoning for these taxes, so I don't agree with that. Of course the government doesn't mind taking some money.

There are many Pigouvian taxes, but not all taxes are Pigouvian.

The concept of taxation predates the concept of equality or economic influence in society, and there is no "official" reasoning for things like property taxes or income taxes in the US (or anywhere else I'm aware of).

Originally, the government decided how much revenue it needed, and told the subjects of its rule how much they owed, and that was it.

That's interesting because governments often act and talk like like their goal is to maximize revenue from taxes :)

Yeah, and in my opinion they are completely deranged. Governments are the source and guarantor for money. They create money for the economy to control, as a proxy for resources. However for them it's not a proxy, they need to deal with the messy reality of resources, since they are setting up the rules and framework for their economy, i.e. they govern them.

The government still needs to raise money for e.g. funding the roads. This is not, because the government wouldn't be able to direct the resources of the economy towards this goal otherwise, but because the costs of that goal should be part of the beneficiaries of that goal. This should prevent inefficient pursue of goals.

For example when you get too less money for roads, it can be because all the foreigners use it for transit, but don't actually fund it, meaning the government subsidizes another governments economy, or because too less people drive on your roads/ people don't care much for the roads, so maybe you are building too much of them. When on the other hand you have to much money for roads, then maybe you are not building enough roads.

However this is not the only measure, as roads also create induced demand/economic activities, i.e. you need to put up roads to foster specific activities, before you see the demand. In other words it's complicated and you need to be an expert in the field you are governing and governing itself.

But while money on its own is (nearly) free for a government, once you have handed it out it isn't free anymore, since it now represents resources, that are also restricted for the government. This means that it still makes sense to be frugal with money, just not for money that was just created by it, but with money that comes to the government for the second time, and is now to be spent again, since this already is a proxy for specific resources.

> governments often act and talk like like their goal is to maximize revenue

I think this often comes from business people who promote (themselves) to government, but don't got the memo, that they aren't working for a company anymore, but instead decide on the framework for companies to thrive or not.

Politics, literally the art to govern [a city], is really the art of creating hard rules that still don't prescribe anything but instead control the famous invisible hand of a free market towards the right behaviour.

Have you any evidence for this proposition?

Yes, they've been moving to Florida in droves for the last decade plus.

Eventually you'll run out of other people's money to spend, and will be forced to face the reality of your own self-sufficiency.

Ah yes we're held hostage by the rich. Do what we say, or we take our ball and go home.

If you're going to balance your budget on their backs, yes: https://taxfoundation.org/blog/one-rich-guy-moves-new-jersey...

Europe figured this out long ago and has a very broad tax base (aka higher taxes on the middle class) to fund their social welfare programs but somehow you never see that proposed as a solution by the middle class in the US...