ems as food, clothing, housing, and education. Taxation enables the government to help those persons whom a free market would not otherwise provide for. An example of this is to fund low-cost housing for those in need. Taxation can also be used as a mechanism for creating economic equality between citizens. A tax system that "taxes the rich" so that the government "can give to the poor" promotes a more equal society.
             Correction of free market imperfections
             Taxation can be used to correct free market imperfections, examples of such market imperfections can include monopolies which may cause prices and supply levels to be set arbitrarily at non-optimal levels or such problems as wasteful competition, where competing companies end up operating at less than optimal capacity. The tax system can also be used by governments as a macro-economic device to speed up or slow down the economy. Higher tax rates will usually lead to less spending and lower tax rates usually result in more spending as taxpayers have more disposable income.
             Each year the government prepares a budget whi
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