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**1. Types of Taxes:**

– Income Taxation:
– Applies to individuals and businesses.
– Levied on profits, gains, and other income.
– Rates vary by system and may have deductions.
– Collection methods include pay-as-you-earn.

– Social Security Contributions:
– General government revenue from social contributions.
– Compulsory payments by employers and employees.
– Based on wages or earnings with fixed rates.
– Some systems provide upper limits on earnings subject to tax.

– Payroll or Workforce Taxes:
– Imposed on employers based on total payroll.
– Taxes may be at both country and sub-country levels.

– Property Taxes:
– Recurrent taxes on immovable and movable property.
– Includes estate, gift, or inheritance taxes.
– Ad valorem levy on property value.

– Inheritance and Expatriation Taxes:
– Includes inheritance, estate, and expatriation taxes.
– Expatriation tax imposed on individuals renouncing citizenship.

**2. Forms of Taxes:**

– Value Added Tax (VAT):
– Applies a sales tax at every value-adding operation.
– Collected at different points in the production process.
– Used in many countries as a consumption tax.

– Sales Tax:
– Levied on commodities sold to final consumers.
– Some US states rely solely on sales taxes for state revenue.
– Exemptions are common for necessities like food and utilities.

– Excise Taxes:
– Indirect taxes imposed during production or distribution.
– Modify consumption patterns for certain goods.
– Include sin taxes and carbon taxes.

– License Fees:
– Imposed on businesses or individuals in certain activities.
– Includes vehicle taxes, occupational taxes, and poll taxes.

– Descriptive Labels:
– Ad valorem, per unit, consumption, and environmental taxes.
– Tax systems classified as proportional, progressive, regressive, or lump-sum.

**3. Historical Taxation:**

– Ancient Origins:
– Taxation dates back to Ancient Egypt and Persia.
– Corvée and tithe were early forms of taxation.

– Evolution of Tax Systems:
– Taxation has evolved over time with various forms.
– Significant aspect of governance throughout history.

– Obsolete Forms:
– Scutage, Tallage, Tithe, and Danegeld were historical taxes.
– Tax farming and feudal tax systems existed.

**4. Economic Impact of Taxes:**

– Revenue and GDP:
– Public finance revenue measured as a percentage of GDP.
– Taxation can impact economic growth and investment.

– Effects on Behavior:
– High tax rates can lead to evasion and avoidance.
– Tax policies influence consumer behavior and market dynamics.

**5. Modern Tax Systems:**

– Global Examples:
Germany and the United States have complex tax systems.
– Advanced economies rely more on direct taxes.
– Developing economies lean towards indirect taxes.
– Tax systems evolve to adapt to economic changes.

Tax (Wikipedia)

A tax is a compulsory financial charge or some other type of levy imposed on a taxpayer (an individual or legal entity) by a governmental organization in order to collectively fund government spending, public expenditures, or as a way to regulate and reduce negative externalities. Tax compliance refers to policy actions and individual behaviour aimed at ensuring that taxpayers are paying the right amount of tax at the right time and securing the correct tax allowances and tax relief. The first known taxation took place in Ancient Egypt around 3000–2800 BC. Taxes consist of direct or indirect taxes and may be paid in money or as its labor equivalent.

All countries have a tax system in place, in order to pay for public, common societal, or agreed national needs and for the functions of government. Some countries levy a flat percentage rate of taxation on personal annual income, but most scale taxes are progressive based on brackets of annual income amounts. Most countries charge a tax on an individual's 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, use taxes, environmental taxes, payroll taxes, duties and/or tariffs. It is also possible to levy a tax on tax, as with a gross receipts tax.

In economic terms (circular flow of income), taxation transfers wealth from households or businesses to the government. This has effects on economic growth and economic welfare that can be both increased (known as fiscal multiplier) or decreased (known as excess burden of taxation). Consequently, taxation is a highly debated topic by some, as although taxation is deemed necessary by general consensus in order for society to function and grow in an orderly and equitable manner through the government provision of public goods and public services, others such as libertarians and anarcho-capitalists are anti-taxation and denounce taxation broadly or in its entirety, classifying taxation as theft or extortion through coercion along with the use of force. Within market economies, taxation is considered as the most viable option to operate the government (instead of widespread state ownership of the means of production), as taxation enables the government to generate revenue without heavily interfering with the market and private businesses; taxation preserves the efficiency and productivity of the private sector by allowing individuals and businesses to make their own economic decisions, engage in flexible production, competition and innovation as a result of market forces.

Certain countries function as tax havens by imposing minimal taxes on the personal income of individuals and on corporate income. These tax havens attract capital from abroad whilst resulting in loss of tax revenues within other non-haven countries (through base erosion and profit shifting).

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