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Why does the government need taxes? Answer: The government needs tax because it needs money to pay for hospitals,schools,and community service. In order for the people to have those services, they contribute to â¦ the fund. tax goes towards government spending on public services such as: healthcare, education, public transport etc...
That's for three reasons: 1  The more the government spends, the more it stimulates the economy. That's because government spending is itself a component of gross domestic product. 2  There are many other countries willing to lend us the money, like China. 3  Politicians get elected for creating jobs and growing the economy.