Taxes
According to Lord Bramwell, a nineteenth century English jurist, “Like mothers, taxes are often misunderstood, but seldom forgotten.” A tax is a contribution imposed by the government on individuals or on property to generate funds to finance operation of the state. It may also be referred to as a “toll”, “custom”, or “excise”, among other names. A tax is assessed according to a reasonable rule or apportionment based on a sovereign state’s authority on individuals or property within the state’s jurisdiction.
Ordinarily, it is imposed on all individuals of a state or state political subdivision, such as a city, regardless of distinct benefits enjoyed by particular individuals. In this way, taxes aim at ensuring uniformity of contribution and a fair apportionment of the financial burdens of government among the state’s residents. A broad range of types of taxes exists, such as income tax, which is a tax imposed on income, property tax, a tax imposed on property, and sales tax, a tax imposed on purchased items.
The imposition of tax is based on various theories and reflect public policy perspectives. The basis of tax assessments and the use of taxpayers’ funds have been subject to challenge throughout the years. Challenges of the basis of assessments have sometimes been driven by some type of argument demanding democratic treatment. A well-known example of this is the voice of the people who cried “No taxation without representation” in the American Revolution.
Through the tax system, the government can attempt to influence behavior, and thereby influence the country’s economy. For example, to encourage formation of certain non-profit organizations, such as charities which benefit society, especially the under-privileged, the government grants tax exemption to qualifying organizations. Also, whereas a sales tax may apply to the purchase of cigarettes or alcohol, the purchase of basic food items, such as bread and milk, may be exempt. In this way, the average person is not precluded from buying basic necessities. The purchase of cigarettes and alcohol, as potentially harmful items, is discouraged. Those who fail to pay required taxes face penalties, ranging from fines to criminal penalties.
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Banking - Business Finances - Economics - Insurance - Investing
Major Purchases - Personal Finances - Stock Market - Taxes
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