We all know that as we earn income, we're required to pay taxes. Generally, the more you earn, the higher your taxes. But what about countries with weaker economies that don't strictly enforce tax laws? Would you prefer to live in such a place?
Let’s break this down: What do taxes actually do, and what are the pros and cons of living in a country where tax enforcement is weak? Overall, does this benefit the people, or does it ultimately make life harder for them?
I don't think that any tax authority is intentionally missing tax or undercounting but some systems are more thorough than others at capturing the right amount. I remember one Scandinavian country that actually publishes the income of everyone which should tell you if they are paying the right tax or living beyond their declared means. The citizens of some countries have actually got into the habit of underpaying and it almost becomes a point of pride in how much you can avoid declaring. However the most effective systems will plug the majority of holes and enforce it, otherwise you undermine collection
amountsrates across the whole system.