What are the three main purposes for which taxes are used? What will

QUESTION

What are the three main purposes for which taxes are used?

What will be an ideal response?

ANSWER

Answer: Taxes are used to pay for public services, such as schools, roads, and public safety. They are used to discourage certain behavior. Taxes on cigarettes and alcohol are meant to discourage smoking and drinking behaviors. Taxes are also used to encourage certain behavior. Tax credits, or tax amounts that can be deducted from a tax bill, can encourage energy independence, for example, through the purchase of solar panels or switching corn crops to the production of ethanol.
Explanation: Taxes are used to pay for public services, such as schools, roads, and public safety, that are basic to a functioning society. They are used to discourage certain behavior. Taxes on cigarettes and alcohol are meant to discourage smoking and drinking behaviors. Taxes are also used to encourage certain behavior. Tax credits, or tax amounts that can be deducted from a tax bill, can encourage energy independence, for example, through the purchase of solar panels or switching corn crops to the production of ethanol.