The Tax Pressure Reflections on the subject

Abstract

Fiscal pressure, and other related concepts such as tax pressure or tax burden, have been devised to estimate the magnitude of the state and the requirements it makes of the private sector to finance itself. For this purpose, indicators are developed based mainly on relating tax collection amounts to the national product. The absolute value of the indicator and its variations are used to evaluate fiscal policies.
It is quite common when analyzing the evolution of the tax burden in Latin America to point out that it has increased significantly in the last decade and this increase is considered as something positive. The arguments supporting this assessment are not many or very well developed. Generally, they refer to unsatisfied social demands, to the need to achieve fiscal solvency, to comparison with higher tax pressures in other countries or regions. In any case, the idea that greater public resources are a good thing predominates.
Greater public resources imply that there will be relatively fewer private resources. In other words, there will be more resources whose use will come from political decisions and fewer at the disposal of the people who generated them and must transfer them coercively. In other words, what proportion of resources for voluntary private exchanges and what proportion for collective and coercive exchanges. This question deserves further consideration and this should be done taking into account a warning by James Buchanan. When analyzing fiscal issues, we must keep in mind what kind of state behavior we are assuming, and it must be based on an analysis of "politics without romanticism".