A fee charged (levied) by a government on a product, income, or / activity.
If tax is levied directly on personal or / corporate income, then it is a direct tax. If tax is levied on the price of a good or / service, then it is called an indirect tax.
The purpose of taxation is to finance government expenditure. One of the most important uses of taxes is to finance public goods & services, like street lighting & street cleaning.
Since public goods & services do not allow a non-payer to be excluded, or / allow exclusion by a consumer, there can not be a market in the good or service, and so they need to be provided by the government or / a quasi-government agency, which tend to finance themselves largely through taxes.
No comments:
Post a Comment