Taxes Around the World Essay

2911 WordsMay 16, 201212 Pages
Taxes Around the World In order to start with the topic of taxes, we must understand first of all what taxes mean, so here are some definitions that can help us to know and understand this concept and to see why the government created them for: A means by which governments finance their expenditure by imposing charges on citizens and corporate entities. Government use taxation to encourage or discourage certain economic decisions. 1 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 and services, such as street lighting and street cleaning. Since public goods and services do not allow a non-payer to be excluded, or allow exclusion by a consumer, there cannot 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.2 As we could read on the definitions on what “taxes” means, we can see and understand that they are nothing but a fee or a contribution that we all, individuals or corporations, provide or pay to the government in order to maintain each of the countries were these contributions are being collected from. We can say that taxes are one of the main sources of income, as a general rule, most governments use the collection of taxes as the main tool for financing their expenses. Individuals and businesses around the world are subject to many different types of taxation systems. In some countries, a significant portion of the total tax burden is levied by the federal government. However, provincial and other local authorities

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