What is the purpose of taxes in relation to public goods?

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The purpose of taxes in relation to public goods is primarily to generate revenue for public services. Public goods are defined as goods that are non-excludable and non-rivalrous, meaning that they are available to all individuals and one person's use does not diminish the availability for others. Examples include clean air, national defense, and public parks.

Taxes serve as the financial mechanism through which the government can fund these essential services and infrastructure that benefit all citizens, even those who may not directly pay for them. Without the revenue generated from taxes, the government would struggle to maintain and provide these vital public goods, leading to potential market failures.

Therefore, the correct answer highlights the crucial role that taxes play in ensuring the availability and maintenance of services that contribute to the overall welfare of society.

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