Ruling is about staying in power, not about good governance. To this end, leaders buy support by rewarding their essential backers relative to others. Taxation plays a dual role in generating this kind of loyalty. First it provides leaders with the resources to enrich their most essential supporters. Second, it reduces the welfare of those outside of the coalition. Taxation, especially in small-coalition settings, redistributes from those outside the coalition (the poor) to those inside the coalition (the rich).
