Classification of modern taxes

taxation

Today a main luxury tax object is the automobile, largely because registration requirements facilitate administration of the tax. But how much more? Individual income tax: A tax on the income of individuals or families, generally applied to wages, salaries, tips, interest, and dividends.

They are not felt in the same degree as direct taxes. No country has adopted a tax with the base of the flat taxalthough many have income taxes with only one rate.

Thus, corporate income faces a higher tax burden than income earned by individuals or by other types of businesses. Thus the amount of total specific tax will vary in accordance with the changes in total output or sales of the commodity and not with the total value of output or sales.

State sales taxes range from 3 to 7 percent, and local sales taxes range from a fraction of 1 percent to 7 percent.

classification of taxes pdf

It takes some from those who can, in theory afford it and re-directs this to the more vulnerable members of society. Direct taxes make it necessary to check and scrutinize the each taxpayers account.

Classification of taxes ppt

Regressive tax - a tax that takes a smaller proportion of a person's income as their income rises. The maximum top estate tax rate is 40 percent. In the case of realization of equity and efficiency, both taxes are needed. Please follow and like us: Share this:. Its rate at present varies from 10 per cent in the slab of Rs. Progressive tax: Generally, a tax that imposes a heavier burden on those more able to bear the burden than on those less able to bear it. Some states also tax other types of business property such as factories, wharves, etc. Hence, direct taxes, and in particular income tax, are normally progressive. Estate taxes are imposed on the transfer of property upon the death of the owner.

VAT possesses certain advantages. When searching on a term with more than one word it is worth checking the 'Match your phrase exactly?

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What is Tax: Meaning and Classification of Tax