Taxes are a compulsory payments to a government, the choice of what taxes to impose is made as part of a government's fiscal policy. The primary purpose of taxes is to raise revenue to pay for government programs, secondary goals are to support decisions that are in the public interest. Since people will try ot avoid being taxed, taxes can be used to change behavior. Major changes to methods of taxation are discussed as tax reform.

Types of taxes

taxes on specific products are called excise taxes. Examples include sin taxes (on "unhealthy" products like alcohol, tobacco and gambling.), and the gas tax.

taxes on assets (rather than income) exist in some jurisdictions include the
estate tax, wealth tax for individuals, capital tax for businesses.

taxes on income in various forms -
  • income tax is paid by individuals on employment income, rental income, and investment income.
  • capital gains tax in some jurisdictions, returns on investments are treated differently than employment or rental income.
  • corporate tax are taxes on income by corporations.

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