Why Are Governments So Inefficient — Yet They Tax Everything?

Hamed Mohammadi
The World
April 27, 2025
Why Are Governments So Inefficient — Yet They Tax Everything?

It’s one of the biggest frustrations people feel: governments seem to tax everything — your income, your home, your car, even the coffee you drink — and yet they often can't deliver basic services efficiently. Why?

It’s one of the biggest frustrations people feel: governments seem to tax everything — your income, your home, your car, even the coffee you drink — and yet they often can't deliver basic services efficiently. Why?

The short answer: bureaucracy loves complexity.
The longer answer: governments aren't built like businesses. They don't have the same pressures to innovate, compete, or streamline. In fact, the bigger the government gets, the more layers of management, regulations, and red tape it adds — all of which slow things down and bloat the system.

Meanwhile, taxes keep rising because there’s always a new program to fund, a new crisis to manage, or simply because governments rarely shrink once they grow. Every dollar you pay gets filtered through endless agencies, offices, and committees before it finally reaches its destination — if it even gets there efficiently at all.

Instead of being rewarded for performance, government agencies are often rewarded for spending their entire budget (or asking for more). Waste doesn’t get punished; it gets papered over. Results don't drive decision-making — politics does.

In the end, taxpayers keep footing the bill while the machine grinds slower, not faster. And unless there’s serious reform, governments will continue taxing more while delivering less.