Revenue may be extracted from sources such as individuals, public enterprises, trade, royalties on natural resources and/or foreign aid.
[4] Taxation became indispensable in western Europe, when countries needed to fund wars in order to survive.
[7]: 59 The effect of a change in taxation level on total tax revenue depends on the good being investigated, and in particular on its price elasticity of demand.
[9] This may be due to: The Laffer curve, however, is not universally accepted; Paul Krugman referred to it as "junk economics".
Economic development traditionally focuses on such things as job generation, the provision of affordable housing, and the creation of retail centers.
Tax base expansion focuses primarily on maintaining and enhancing real estate values within the municipality.
City officials in Concord, New Hampshire found that a five percent overall increase in the assessed value of existing property would have the same impact on the tax rate as the addition of 2,000,000 square feet (190,000 m2) of new industrial property or 1,000,000 square feet (93,000 m2) of new office/R&D development, both of which are likely to take fifteen or more years to realize.
Good tax base management may lead to even better economic development, because investors and businesses will want to be in a community.
Instead of offering incentives to attract business, they may be willing to pay to come to a community because it's a good place to live, work, shop and play.