What is Taxes: Definition and 93 Discussions

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 fund government spending and various public expenditures. 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 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, payroll taxes and/or tariffs.
In economic terms, taxation transfers wealth from households or businesses to the government. This has effects that can both increase and reduce economic growth and economic welfare. Consequently, taxation is a highly debated topic.

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  1. kyphysics

    Can Home Repair or Renovations Reduce One's Taxes?

    I've Googled this a little bit after an old college friend mentioned to me that her parents supposedly used some method like this to reduce their taxes regularly (she seemed to imply they did this "frequently" on the recommendation of their accountant - maybe not every year, but it sounded like...
  2. kyphysics

    If I Made Mistake on Taxes in 2019, Can I Correct It If..

    it was a situation that would have led to me getting some of the money back (i.e., I paid too much that year)? I know if you paid too little, the IRS would want you to correct it obviously, so they can rake in that $. But, what if you made an error and should have paid less that year? Would...
  3. bagasme

    Effects and Implications of 100% Income Tax Rate

    Hello all, Suppose that in a monopoly game (board game), a player passed through Go and receive $2000 as salary. Then he landed on Income Tax and he paid $2000 too. It means that he paid 100% tax rate, in other words he paid all of his salary only for the tax. What the effects and implications...
  4. S

    Internet Sales Taxes: Who Pays What & When?

    A recent headline story in the USA is that the Supreme Court decided in favor of requiring online sellers to collect state taxes - subject to certain restrictions on how the state facilitates this. What determines which state taxes apply? Is it the physical location of the buyer when the sale...
  5. B

    High state property taxes- pork barrel spending?

    I've heard that the average homeowner in the state of Massachussetts (MA) pays about $15,000 in state property taxes per year. I believe that the standard deduction on Federal income taxes is $6,400 per year. State property taxes can be itemized on Federal income taxes. It seems to me that...
  6. C

    News Can Income Tax Rate Hikes Close the Deficit? (interesting article)

    AUTHOR: William Ahern, Director of Policy and Communications, The Tax Foundation Ed. Note: Our Fiscal Future has invited distinguished guest bloggers to share their views about how to get the nation on a sustainable fiscal path. The views presented are their own, and do not necessarily...
  7. sophiecentaur

    Medical Our genes, medical insurance and tax.

    Any insurance is, essentially, a gamble. Someone (a company) with more money than us is prepared to gamble, offering a huge stake (the payout) against our small stake (the premium). The Insurer works out the probability of a payout and calculates the premium that they want so that they make a...
  8. C

    News US Income Tax Rate Increase: Fact or Fiction?

    I heard from a source I would usually consider reliable on this matter that the top US income tax rate was going to be increased from 35 to 39% (not this year but in a few). Is this true? I wasn't able to find anything online in a brief search.
  9. D

    What Tax Breaks Can Students Claim When Filing Taxes?

    I am wondering if anyone here could provide some information about filing taxes as a student? It's my first year doing it, and I am wondering what tax breaks I am eligible for. I have been reading [PLAIN]"this"[/URL] but I'm not quite sure which items I benefit for and which will give me the...
  10. Ivan Seeking

    News Speaking as a business owner about taxes

    I wanted to address what I see as a fallacy in the argument against taxes on companies and corporations. As the the saying goes, if you tax companies, they will just pass along those costs to consumers. While that may be true in some cases, it is not always true. The fact is that I have to...
  11. edpell

    News Taxes: How Much Should Individuals Contribute to Government Spending?

    What percentage of gross national product do we feel government should consume? And conversely what percentage should be left in the control of individuals? I would say that 10% for the federal level and 10% for the state level and 10% for all other levels would be reasonable. That is 30%...
  12. humanino

    News Will Obama's Bank Tax Really Benefit Consumers and Businesses?

    Obama Calls for Bank Tax to Recoup Bailout I'd be interested to read people's opinion. I especially do not understand the following comment Thank you in advance for sharing thoughts.
  13. G

    Cheaper Apartment: Tax Rates & Cost Estimate

    I found an apartment cheaper than the one I'm currently in. Its around $500.00. I was just wondering if the tax rates for housing decreases with lower apartment costs -- do they? Also, what would the overall cost estimate to be (including taxes)?
  14. 0

    Actual After-Tax Rate of Return. [Engineering Economics]

    Greetings, I'm trying to solve a 3 part problem which has the following questions: a) Determine the rate of return before taxes. After Solving: Answer: 21 % b) If the effective income tax rate is 42 percent, what is the approximate after-tax rate of return? After Solving: Answer: 8 %...
  15. J

    News Surprise! Netherlands Labeled a 'Tax Haven' by Obama

    Who would have though that our "socialist" country would be labeled as such. http://crossroadsmag.eu/2009/05/netherlands-is-tax-haven-obama-says-dutch-government-astonished-at-tax-haven-branding/ I am sure that this will be rectified soon.
  16. Ivan Seeking

    Get Answers to Your Questions About Associated Tax Relief

    So what is the deal with this? http://www.associatedtaxrelief.com/ On their commercials they show people who claim they had drastic reductions in their tax debt. One says that he owed over $130,000 and had his tax liability reduced by over $90,000. What's with that?! Can I just neglect to...
  17. J

    News Thinking 'outside the mind' on taxes.

    http://www.msnbc.msn.com/id/29298315" He is one of the innocent Obama appointees. The idea here is that you put a gps in your car that records how many miles you've traveled. Then when you go to the gas station, they read the gsp and you pay based on the number of miles you have travelled...
  18. T

    News The FairTax in place of income tax

    The "FairTax" in place of income tax First of all; I'm not interested in any sort of partisan quibbles as they often degenerate into arguments that go nowhere. People will subscribe to what they subscribe to... I'm just putting this out there to get your thoughts and perhaps to make you aware...
  19. Andre

    News Why Did Obama Drop the Oil Tax Proposal?

    http://www.telegraph.co.uk/news/worldnews/northamerica/usa/barackobama/3551022/Barack-Obama-breaks-first-campaign-promise-by-dropping-oil-tax.html Wondering what the relation is with the economic crisis.
  20. J

    Backing Out Sales Tax from Gross Total - Auditor Question

    does anyone know the formula to back out sales tax from a gross total - I am an auditor and I need to back out sales tax ie: gross sales 50,859.18 - this total includes sales tax at 12.25% - i need the formula to back out the sales tax form the gross sales - ANy one know??
  21. Ivan Seeking

    Are You Ready for Obama's Tax Plan? Use Our Calculator to Find Out!

    Estimate the change in your tax liability based on Obama's tax plan. http://alchemytoday.com/obamataxcut/
  22. Ivan Seeking

    News Churches to challenge tax exemption law - separation of church and state

  23. P

    News Is Obama's Tax Plan Really Tax-Free?

    Obama -- tax free ? :cool: [coughing] He said he would cut down tax
  24. S

    How does one find the property tax rate for a certain area?

    A book I was reading advocated that anyone who was interested in buying land in a rural area find out how much the property taxes on the land are before buying any land. How does one find out what the property taxes will be for a given amount of land?
  25. B. Elliott

    News Obama's Global Tax Proposal $845 billion

    This is the last thing the US needs to be worrying about. When he said that he's wanting to better relations with other countries, how did I know that it would also end up costing the US money for these 'improved relations'? This man is going to tax us to death. Obama bill: $845 billion...
  26. E

    Why Is Sales Tax Charged Differently on Amazon and Barnes & Noble Purchases?

    I've noticed that there is never any tax on anything I buy from Amazon. How is this possible?
  27. TheStatutoryApe

    News Tax on Income/Wealth and Fairness

    Have you been hitting the glass ****?! I live in the state with one of the highest minimum wages, highest state revenues, and the biggest economy in the union but I would be more than welcome to make half of what you consider 'middle class'. Even a quarter of it. I could live quite...
  28. G

    What are you going to do with your tax rebate check?

    Got my $600 Bush "economic stimulus" check yesterday. Spent it already on paying off my credit card. The rest is going to be used to buy gas and food. What are you buying with yours?
  29. Evo

    Tax rebates to arrive earlier than expected

    Woohoo, according to this, my check will be direct deposited into my bank account before May 5th. :approve: (I took the direct deposit option). The link has a schedule of dates. http://www.savvysugar.com/1576586
  30. Ivan Seeking

    News What did the average taxpayer's $13,112 go towards in 2007?

    http://www.thirdway.org/data/product/file/129/Third_Way_-_What_You_Paid_For_Memo.pdf I thought this was particularly interesting as it breaks down the US budget in terms of the dollar per item per household. It is often quite striking when one compares the amount spent on various programs -...
  31. C

    Calculate Sales Tax on $1.25 Purchase - Effective Rate

    Hi everyone, Homework Statement A child is surprised that she must pay $1.40 for a toy marked $1.25 because of sales tax. What is the effective tax rate on this purchase? Homework Equations The Attempt at a Solution I know that the difference between the two is .15. I could...
  32. E

    News Should We Impose the Tax on the Producer or Consumer? Employer or Employee?

    The question of who to "place" a tax on is often brought up in policy debates. For example, people often ask, "Should we impose the tax on the producer or consumer?" or "Should we impose the tax on the employer or employee?" In reality, this is pretty much a trivial question, because in...
  33. E

    News Anyone Heard of Tax Competition?

    This was a first for me (although the concept is not new). Here's a video on Tax Competition:
  34. wolram

    Calculate Your True Spending Power

    Do you know what your actual spending power is ? If you earn $1000 a month deduct all the taxes, fuel, purchase, income, etc, etc.
  35. G

    News Is Huckabee proposing a 23% sales tax and abolishing income and payroll taxes?

    http://www.latimes.com/la-na-salestax24dec24,0,5286232.story?page=1&coll=la-home-center and abolish the income and payroll tax? I would just move close the border with Canada and hop the border every single time I needed to go grocery shopping.
  36. Ivan Seeking

    News If environmentalists are evil, then tax the churches

    Has anyone else noticed how the Christian right now associates environmentalism with evil? This has come to my attention a couple of times recently while dealing with a couple of customers. In fact I have noticed it for a long time but never thought about it explicitly. I guess the logic is that...
  37. P

    Savings/retirement/taxes questions?

    savings/retirement/taxes questions?? hey all so I got my taxes done for this year. I'm a university student but I'm in a co-op program so I'm still making some money. i just got one question...for now... I can make RRSP (registered retirement savings plan) (in Canada) contribution which are...
  38. P

    How Do I Create a Valid Tax Receipt for Rent Payments?

    hey I'm subletting this place for the summer, it's a student house and I'm getting from another student. My mom says I should get a receipt for my rent for tax deductions. I don't know how to do that and I'm pretty sure the person I'm renting from wouldn't either. So what's involved. Do I just...
  39. Ivan Seeking

    News Saudis Increase Production: We've Got Them on the Run!

    The other day I saw a report indicating that the Saudis have now begun protecting their interests by increasing production, thus moderating the price of crude so as to keep alternative fuels out of reach. I don't recall exactly where I saw this, probably on PBS or a Sunday news show, but I did...
  40. B

    Calculate Gross Tax only knowing Net Earnings

    Hi All, I was wondering if it is possible to work out a formula for calculating what your gross earnings would have to be to earn a certain net value. The tax on earnings scales go like this: Between $0 - $6000 you pay no tax. Between $6001 - $25000 you pay 15c per dollar. Between...
  41. wolram

    Fair Taxation: Finding the Right Method

    What is a fair method of taxation? http://en.wikipedia.org/wiki/Tax_reform I would support a purchase tax, if staple food, bread, potatoes, medical care etc were untaxed, in other words the very basics for life.
  42. ShawnD

    Comparing Tax Rates Across Countries: The Impact on Income and Deductions

    It seems like comparing countries, especially when it's against the US, always comes down to taxes. Why no health care? Taxes. Why is military big/small? Taxes. Public education? Taxes! This thread is really simple. State where you live and how much of your paycheck, as a percent, is jacked...
  43. russ_watters

    IRS Questions $500,000 Tax Error

    So I got a letter from the IRS this past week. I figured it was about a little penalty for being slow with my estimated taxes or something (I'm kinda self-employed, so I pay quarterly taxes...sometimes). Instead, it was about my 2004 taxes. There was a discrepancy, they said, between the...
  44. K

    News Can Corporate Taxation Be Based on Charitable Giving?

    I propose that companies that provide employees with higher wages in their field should have lower corporate tax. I propose that companies that provide employees with lower wages in their field should have ordinary corporate tax. Any form of charity increase by a company, I think, should...
  45. R

    What can i do to keep more of my sales comission from tax?

    hi, i am going to be getting sales commission on our projects at my company and I want to know what kind of tax strategy will be best for me. My employer is willing to pay that commission in whatever way I prefer...so I am wondering if anyone has any advice for me as to how I can avoid...
  46. Ivan Seeking

    News The philosophy behind the Fat Tax

    Well, I've been predicting this for years. What's really at issue is the basic question of whether or not we should, as a deterrent, tax people for making poor choices in their lifestyle. We have done this with smoking and alcohol, and in the case of seat belts and motorcycle helmets, we have...
  47. M

    Tax Laws in the U.S.: What to Know

    Hi. I live in the United States. I know that most of us aren't lawyers and can't technically give legal advice. That said, if I know I don't owe any taxes (to the feds) then I don't have a "deadline" right? I mean if I owe something, then they can mail me an invoice I assume?
  48. W

    Stipends, Taxes & Tuition: Qs from a Struggling Grad Student

    I'm having a surprisingly hard time discovering this information, perhaps a current grad student can help. I know that income from a stipend is considered taxable income, so I must pay federal income taxes on it. But what about payroll taxes? Will the school withhold the usual amounts for...
  49. Ivan Seeking

    News Tax breaks for the rich that undermine national security

    http://www.pressofatlanticcity.com/business/national/story/3181469p-11893943c.html So, tax breaks that help to increase the demand for oil... Whose side are these guys on?
  50. K

    News Management of Money Flow via Distributive Corporate Tax