A tax is a payment mandated by the government to be paid by individuals, households, and businesses to finance government operations.
Taxes provide governments with the vast majority of the income needed to provide public services. There are many types of taxes. Personal and corporate income taxes are levied directly on a family or corporation. In most countries income taxes are progressive, meaning those families or corporations with a higher income have a higher tax rate. Sales taxes are collected by the seller when a good is sold. The amount is a percentage of the purchase price. This is a regressive tax because the sales tax comprises a larger percentage of their income than wealthier consumers. While wealthier consumers may spend more in a year, they also invest, so less of their income on a percentage basis is spent as a sales tax. The property tax is assessed based on the value of an asset owned by the taxpayer. Other common taxes include excise taxes, estate taxes, tariffs, value-added taxes, capital gains taxes, and payroll taxes such as Social Security and medicare. Economists study how a tax affects the economy. Does one tax discourage investment more than another? Does a tax burden lower-income families more than wealthy families?
Circular Flow Model – We Depend on Each Other
Changes in Supply – The Producer’s Perspective
Economic Systems
Marginal Analysis – How Decisions are Made
Managing Supply Using Outsourcing, Tariffs, Subsidies, Quotas & Licenses
Who Really Pays an Excise Tax
