Tax

A tax (from the Latin taxo) is a compulsory financial charge or some other type of levy imposed upon
a taxpayer (an individual or legal entity) by a governmental organization in order to fund various
public expenditures.[1] A failure to pay, along with evasion of or resistance to taxation, is punishable
by law. Taxes consist of direct or indirect taxes and may be paid in money or as its labour
equivalent. The first known taxation took place in Ancient Egypt around 3000–2800 BC.
Most countries have a tax system in place to pay for public, common or agreed national needs and
government functions. Some levy a flat percentage rate of taxation on personal annual income, but
most scale taxes based on annual income amounts. Most countries charge a tax on
individuals income as well as on corporate income. Countries or subunits often also impose wealth
taxes, inheritance taxes, estate taxes, gift taxes, property taxes, sales taxes, payroll taxes or tariffs.
In economic terms, taxation transfers wealth from households or businesses to the government. This
has effects which can both increase and reduce economic growth and economic welfare.
Consequently, taxation is a highly debated topic.

Contents

 1Overview
 2Purposes and effects
 3Types of taxes
o 3.1Income
 3.1.1Income tax
 3.1.2Negative income
 3.1.3Capital gains
 3.1.4Corporate
o 3.2Social-security contributions
o 3.3Payroll or workforce
o 3.4Wealth
o 3.5Property
 3.5.1Property taxes
 3.5.2Inheritance
 3.5.3Expatriation
 3.5.4Transfer
 3.5.5Wealth (net worth)
o 3.6Goods and services
 3.6.1Value added
 3.6.2Sales
 3.6.3Excises
o 3.7Tariff
o 3.8Other
 3.8.1License fees
 3.8.2Poll
 3.8.3Other
o 3.9Descriptive labels
 3.9.1Ad valorem and per unit
 3.9.2Consumption
 3.9.3Environmental
  3.9.4Proportional, progressive, regressive, and lump-sum
 3.9.5Direct and indirect
o 3.10Fees and effective
 4History
o 4.1Trends
o 4.2Forms
 5Economic effects
o 5.1Incidence
o 5.2Increased economic welfare
 5.2.1Government spending
 5.2.2Pigovian
 5.2.3Reduced inequality
o 5.3Reduced economic welfare
 5.3.1Cost of compliance
 5.3.2Deadweight costs
 5.3.3Perverse incentives
 6In developing countries
o 6.1Key facts
o 6.2Summary
 7Views
o 7.1Support
o 7.2Opposition
o 7.3Socialist view
o 7.4Choice
o 7.5Geoist View
 8Theories
o 8.1Laffer curve
o 8.2Optimal
o 8.3Rates
 9See also
o 9.1By country or region
 10References
 11Further reading
 12External links