section_path: Purposes and effects
section_name: Purposes and effects
paragraph_text: Purposes and effects
  
  The levying of taxes aims to raise revenue to fund governing, to alter prices in order to affect demand, or to regulate some form of cost or benefit. States and their functional equivalents throughout history have used the money provided by taxation to carry out many functions. Some of these include expenditures on economic infrastructure (roads, public transportation, sanitation, legal systems, public security, public education, public health systems), military, scientific research & development, culture and the arts, public works, distribution, data collection and dissemination, public insurance, and the operation of government itself. A government's ability to raise taxes is called its fiscal capacity.
  
  When expenditures exceed tax revenue, a government accumulates government debt. A portion of taxes may be used to service past debts. Governments also use taxes to fund welfare and public services. These services can include education systems, pensions for the elderly, unemployment benefits, transfer payments, subsidies and public transportation. Energy, water and waste management systems are also common public utilities.
  
  According to the proponents of the chartalist theory of money creation, taxes are not needed for government revenue, as long as the government in question is able to issue fiat money. According to this view, the purpose of taxation is to maintain the stability of the currency, express public policy regarding the distribution of wealth, subsidizing certain industries or population groups or isolating the costs of certain benefits, such as highways or social security.