Why Do State & Federal Governments Collect Taxes?

by Walter Johnson ; Updated July 27, 2017

Governments are agents of force in that all government actions are ultimately backed by the threat of force. However, governments can also be agents of the common good. In their function as public authority, governments need to forcibly collect taxes that would otherwise not be voluntarily given to government. Governments at all levels justify their ability to collect taxes through coercion because they are representative of the common good rather than private profit.

Greece and Rome

States have not always forced their citizens to pay taxes. In ancient Greece and Rome, public taxes were paid voluntarily by the wealthy to finance things in their interests such as public buildings and military spending. The Romans used the urban wealthy to voluntarily pay money for the upkeep of the city from which their fortunes derived. Rome had coercive taxes, but local government was run by the wealthy, who used their own money to finance public works.

The Articles of Confederation

The Articles of Confederation happened before the Constitution. The articles were drawn up to oversee the cooperation of the 13 newly independent colonies. One problem with the articles was that the federal government had no power to levy taxes. States, if they wanted, could donate money for the central government. When Shays' Rebellion broke out, the states could not handle it by themselves. Shays' Rebellion was about government power and its ability to take property by force in payment of debt. State governments then petitioned the federal state to send troops to repress the rebellion. The result was, eventually, the creation of the Constitution that had the coercive power to levy taxes.

The Anti-Federalists

The Anti-Federalists in American history rejected the Constitution based on the argument—among others—that the federal government would become too powerful with taxing authority. They said the federal government would become too distant to accurately reflect American opinion, and therefore, its taxing power would lead them into every aspect of American private financial life. Taxation was tyranny since it forced the government to monitor the income and finance of all taxpayers. Local and state governments were safer because they were closer to the people they taxed.

The "Free Rider"

The concept of the “free rider” is important to why governments must use force to collect taxes. Things considered “public goods” like law and order or national defense, are enjoyed by everyone regardless of how much they have contributed. If a citizen does not contribute to clean air, another common good, he enjoys it anyway, taking advantage of those who do contribute. These people are called “free riders.” Since no one would pay taxes voluntarily under the “free rider” idea, the state must force people to pay.

About the Author

Walter Johnson has more than 20 years experience as a professional writer. After serving in the United Stated Marine Corps for several years, he received his doctorate in history from the University of Nebraska. Focused on economic topics, Johnson reads Russian and has published in journals such as “The Salisbury Review,” "The Constantian" and “The Social Justice Review."