This involvement is measured as a percentage of the GDP - the Gross Domestic Product. Research shows that public spending of tax money is 6 times less efficient than the same money invested by the private sector. Every Denar paid to the tax collector is one Denar less invested in the formation of new businesses and one Denar less invested in private consumption. We can safely state that taxes inhibit economic growth and increase unemployment. So the current mood in the West is anti big government and anti taxation.
People evade taxes.
It is estimated that Macedonian firms and individuals hold more than 1 billion USD in undeclared cash - against an official figure of 200 million USD in circulation in the whole Macedonian economy. People openly refuse to pay taxes and they take their governments to court on these issues. In fiscal theory, we differentiate between progressive and regressive taxes. A progressive tax is one which is larger - the larger the income is. A regressive tax is one that totally unrelated to the level of income.