Thinking clearly about tax law and policy requires attending both to what is seen and what is unseen. In one respect, taxation is one of the most visible and salient things that government does. It is the most universal and pervasive way that people interact with the state because it touches on so many aspects of our personal and professional dealings. At the same time, the effects of taxation on the ordering of society can be subtle and complex. The ways in which taxes change prices in a market economy and nudge people to reorder their lives can have dramatic effects on the shape and texture of economic and social life when they are aggregated. It can be difficult to discern these effects of taxation in the roiling of broader economic and social movements, and so it is tempting to ignore them and think only about the most apparent features of tax law, no matter how naïve a perspective it provides. The most seen consequences of taxation are the payments made by individuals and businesses to the government and the services that government provides.
Taxation functions, first and foremost, as the mechanism for raising money or resources for our collective projects carried out by the state; it is the need to pay for things like roads and national defense and to employ police officers, firefighters, and judges that makes taxes necessary.
It is true that there are other things that governments can do, at least in the short run, to pay for public works without raising taxes. For example, sales of public property can generate a one-time surge of revenue. Or, for governments with control over the money supply, issuing new currency can finance government programs. However, even this “printing press” approach to government finance will eventually require future tax increases, or else the result will be inflationary pressure on the prices of goods and services that effectively taxes people by reducing their purchasing power.