What are taxes for

I've been interested in taxes for a while - The Deficit Myth, Triumph of Injustice, and Capital have been my favorite reads so far. A tax on unrealized capital gains has been in the media cycle recently, and I asked about it on Twitter, because people seem to oppose it for surprising reasons. I think one of the core questions is what are taxes for? The obvious answer is to fund government services, but there's some useful detail under that:

To fund specific things

A lot of taxes that supposedly fund something, don't. For example, a lot of people think that tolls, gas taxes, and generally "user fees" paid by drivers are the funding source for roads. They're usually a funding source, but in a lot of states, they fund less than half of the budget for roads. This leads to a lot of darky humorous scenarios in which people complain about how cyclists aren't funding something because they aren't paying gas taxes or tolls, but the thing they're talking about isn't funded by those taxes anyway.

Real estate taxes paying for schools is a classic case, but even that is not entirely true, with local schools being funded by state, federal, and varies dramatically by state.

To encourage consuming some things and discourage others

Sin taxes are controversial but they're definitely part of the picture: high taxes on cigarettes seem justified to me because that product causes untold deaths and doesn't have much in the 'pros' column.

Or take New York's long-delayed congestion pricing plan, a pigouvian tax on people casually driving into and around Manhattan. I've been at tables of people discussing whether the fee would just go into the MTA's slush fund, or whether it would fund specific programs that they wanted it to - valid questions, but the other thing, the thing that is perhaps most important, is that it would discourage excess traffic in Manhattan. Fewer cars means fewer kids getting asthma from pollution, fewer drivers killing cyclists and pedestrians. It means faster buses and quieter streets. The revenue is great, but if all of the revenue went into a money-burning machine, there would still be reasons to implement the plan.

To shape the wealth curve

The approach from the MMT & Piketty corner, clumsily summarized, is that taxes are a way to redistribute wealth, as much as they are a way to generate tax revenue. MMT claims that the national deficit is fundamentally a value in accounting that the government can affect through issuing more currency: the only limiting factor is how much inflation is caused by that process. Money is created and destroyed by the government, and the demand for money is created by taxes. I think this is a very compelling theory.

One direction you can take this is that high taxes on the ultra-wealthy are essentially an end in themselves: it's nice to use that money to build infrastructure or fund the national parks, but the decrease in the country's gini coefficient enough to justify them.

This also generally makes sense arithmetically: the enormous amount of wealth held by the top 1% in America is staggering, but nothing in comparison to the national budget. The federal budget is measured in trillions, while our top billionaires are in the low hundreds of billions. It would be good, in my opinion, to tax those billionaires: inequality is bad in every way. But taxing them to pay for stuff is a different, and sort of less compelling justification, than taxing them to take some money from them, money that they could never spend in a hundred lifetimes and, despite all the media hype, are not donating fast enough.