but they're expensive

and governments across the world

are feeling the pinch.

So, how can we continue in the future

to afford good quality public services?

Why has pressure on public services increased?

Populations are aging.

As the number of retirees grows,

working people are going to have to pay more taxes

to support them.

And as healthcare technology improves,

the cost of health care is also going to rise.

But where to find the cash?

Basically governments can tax three things,

income, consumption or wealth.

It's not your imagination.

Income taxes really have been increasing

over the past 50 years.

The evidence shows that taxes on income

including corporation tax discourage people from working.

Countries with low income taxes

such as the UK tend to have stronger economic growth.

Second, consumption.

This is things like sales tax in America

or value-added tax on purchases in Europe.

One problem with consumption taxes

is that they hit poor people hardest

who spend more of their income on day-to-day expenses.

Third, we have wealth taxes.

This could be a better idea

than taxing income or consumption.

This is partly because it places a higher levy

on the things that rich people have

such as property, and investments.

Some economists advocate something called a land value tax

and this is basically where you tax

the value of plots of land

and this can raise a lot of money.

A land value tax

has very few unintentional bad consequences.

The problem is that taxing wealth

is not politically easy.

Homeowners, for instance, are gonna be furious

if they're asked to pay higher property taxes

but if people want good government services,

it's gonna need money.

Taxes on wealth are always unpopular

but sooner or later, governments

are going to have to bite the bullet.