TAXATION

Taxation is a system of raising money to finance government services and activities. Governments at all levels–local,rift gold, state, and national–require people and businesses to pay taxes. Governments use the tax revenue to pay the cost of police and fire protection, health programs, schools, roads, national defense, and many other public services.

Taxes are as old as government. The general level of taxes has varied through the years, depending on the role of the government. In modern times, many governments–especially in advanced industrial countries–have rapidly expanded their roles and taken on new responsibilities. As a result, their need for tax revenue has become great. Through the years, people have frequently protested against tax increases. In these situations, taxpayers have favored keeping services at current levels or reducing them. Voters have defeated many proposals for tax increases by state and local governments.

Kinds of taxes

Governments levy many kinds of taxes. The most important kinds include property taxes, income taxes, and taxes on transactions. Property taxes are levied on the value of such property as farms, houses, stores, factories, and business equipment. The property tax first became important in ancient times. Today, it ranks as the chief source of income for local governments in the United States and Canada. Most states of the United States and provinces of Canada also levy property taxes. Property taxes are called direct taxes because they are levied directly on the people expected to pay them. Income taxes are levied on income from such sources as wages and salaries,rift gold dividends, interest, rent, and earnings of corporations. There are two main types of income taxes–individual income taxes and corporate income taxes. Individual income taxes, also called personal income taxes, are applied to the income of individuals and families. Corporate income taxes are levied on corporate earnings. Income taxes may also be levied on the earnings of estates and trusts. Income taxes generally are considered to be direct taxes.