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ity will always remain. Taxes are the instrument upon which a reforming social democracy will rely. Political parties should demonstrate strong interest in tax system as expression of the desirable relationship between a government and its people. Taxes should exemplify trust and consent, and so make a positive contribution to the strength and stability of society.

The moral benefit of growth- The relation between income and happiness was predicted more than 200 years ago by Adam Smith in “The Wealth of Nations”. He notices that in the progressive state, while the society is advancing to the further acquisitions, then the condition of the great body of the people seems to be the happiest and the most comfortable; while it is in the stationary period, people are and miserable declining state [16] .

There is direct evidence that lower taxes and smaller government intervention increase happiness. The well known phrase of A. Smith “laisser faire” advocates that it should be no concern of the state. The relationship between happiness and government intervention is published by research of a Swiss University:

“Our results show that life satisfaction decreases with higher government spending. ... It is alleviated by government effectiveness - but only in countries where the state sector is already small. ...life satisfaction decreases with government‘s active involvement in the economy. ...the data on life satisfaction are from the third and fourth waves of the World Values Survey... The evidence quite clearly supports the public choice view that excessive government involvement is detrimental to individual’s quality of life. ... We therefore conclude with a rather simple policy implication: governments interested in maximizing the life satisfaction of their voters should, regardless of their ideology, limit their direct interventions in the economy to allow voters a high degree of personal freedom.” [17]

Economic growth also supports other benefits with regards to people, as peace, tolerance and better behaviours. The Economist writes:

“Growing prosperity, history suggests makes people more tolerant, more willing to settle disputes peacefully, more inclined to favor democracy. Stagnation and economic decline are associated with intolerance, ethnic strife and dictatorship. ...If people are becoming better off relative to their own past standard of living, they will care less about where they stand in relation to others. If they are not growing better off relative to their own past standard of living, they will care more about their placing in relation to others-and the result is frustration, intolerance and social friction. Growth, in short, has moral as well as material benefits. “ [18]

Economic growth is not an elixir, it does not solve all problems, but a more prosperous economy certainly makes many problems easier to deal with. Tax systems help promote growth by encouraging governments to shift toward optimal tax policy. To be sure, tax competitions between different economies influence their economic performances. The powerful forces of economic liberalization, the balance of the political pressures and the expansion size and power of government, unquestionably have been in favor of re-examination of each economy tax system. In other words, the modern period of globalization and competition are of assistance to the optimal system of taxes, probably no