Taxpayers and tax consumers
Funds from taxation must be taken from economic actors and then provided to other economic actors. An actor can fall into one of two categories: taxpayers and tax consumers.
- A taxpayer is a person who pays more tax than he or she receives.
- A tax consumer is a person who receives more funds from taxation than he or she pays.
Taxpayers and tax consumers necessarily have conflicting interests, as tax consumers benefit from the funds expropriated from taxpayers. Taxpayers may only benefit indirectly from the services that the tax consumers provide, often called "public services". This contrasts with the producer-consumer relationship, wherein two economic actors will exchange if and only if the exchange is mutually beneficial. Because taxpayers cannot choose to decline paying tax, there is no guarantee that tax consumers will confer adequate, or even any, benefit to taxpayers.