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The legal definition and the economical definition of taxes differ in that economists do not regard many transfers to governments as taxes. For example, some transfers to the public sector are comparable to prices. Examples include tuition at public universities and fees for utilities provided by local governments. States and their functional equivalents throughout history have used money provided by taxation to carry out many functions. When expenditures exceed tax revenue, a government accumulates debt. A portion of taxes may be used to service past debts. According to this view, the purpose of taxation is to maintain the stability of the currency, express public policy regarding the distribution of wealth, subsidizing certain industries or population groups or isolating the costs of certain benefits, such as highways or social security.
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