The transfer of funds.

Put simply, taxation is the means by which people are forced to give money to an organisation, or suffer a legal penalty.  Every pound taken from me is done so on the basis of legal authority, whether it be income tax, VAT, council tax, road traffic tax or any others you may care to think of. Some taxes are described as charges: parking charges is one example.  I take the view that whenever a charge by a public body is more than the cost of providing a service it is in effect a tax.

No taxation without representation is one of the basic principles of a democratic society.  Governments do well to remember that their financial resources come from people forced to part with money.  Yes, governments can 'print' money by quantitative easing, but this simply devalues the coinage and is in effect a tax.  Yes, governments can  and do borrow money, but it has to be repaid.

See also:  http://www.telegraph.co.uk/finance/personalfinance/pensions/9596938/Pension-annuities-in-freefall-due-to-money-printing.html

For contra opinion see:  http://blogs.telegraph.co.uk/finance/jeremywarner/100020649/a-load-of-stuff-and-nonsense-is-being-said-about-qe-and-pensions/

One of the functions of government is the redistribution of money.  At a basic level the payment of benefits is redistribution of funds.  At another level, income tax bands result in more being taken from some individuals than others.  You may argue that corporation tax is not a tax on individuals, but it is, it reduces the amount available to pay dividends on shares and many shares are held by pension funds which in turn pay out pensions and annuities to individuals.

A few examples of redistribution.

• Each year parish councils raise a precept and I am obliged legally to pay it.  In my parish the council is considering purchasing a building and turning it into a community centre, concentrating on youth activities.  I have no problem with this, if I had I would vote at the next election to oust the councillors in favour of the purchase.  The council has also awarded a grant to the local citizens' advice bureau.  Has this sum been ring-fenced so that it is used for CAB clients who live in my parish?  Probably not, however it is for the wider good that CABs have the funds to operate, so again I have no objection.

• District and county councils redistribute funding by pouring resources into areas of deprivation, by provision for social services etc.  I might not live in such an area nor have need of social services, but I do not object to my money being used for these purposes, again for the public good.  However, I do object to a £400,00 pay-off for the ex Managing Director of Kent County Council which has seen some of my money put into the pocket of another person.  Come election time this latter action may influence my vote.

• In the UK the government redistributes money through the annual local government settlement which is intended to target money to deprived areas.  A regular complaint is that Labour governments penalise shire counties whilst Tory governments do the opposite.  

• The UK government redistributes funds using the Barnett Formula, a source of much contention. See: http://en.wikipedia.org/wiki/Barnett_formula

•  The European Union transfers funds through the the Structural Funds and the Cohesion Fund. See: http://en.wikipedia.org/wiki/Structural_Funds

All the above is undertaken from taxation, from the use of your and my money taken away from us. So, when MEPs, MPs and councillors wax lyrical in election addresses about what they have achieved for us, remember it is what they have achieved (or failed  to achieve)  with our money.

Seealso:  http://blogs.telegraph.co.uk/news/iainmartin1/100183908/the-shocking-news-that-there-isnt-any-money-may-finally-be-filtering-through-to-the-scottish-parliament/