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An income tax is a tax imposed on individuals or entities (taxpayers) in respect of the income or profits earned by them (commonly called taxable income). Income tax generally is computed as the product of a tax rate times the taxable income. Taxation rates may vary by type or characteristics of the taxpayer and the type of income.
Specific utility taxes - in this case, certain services are provided on a utility basis and consumers are charged fees, user charges, or tolls. Taxes instead of fees - In cases where direct fees are costly to impose, a tax on the free product can be used instead of fees. For example, taxes can be used in lieu of tolls on automobiles.
Direct tax is a tax paid by a person, as opposed to a tax levied on a business that the person indirectly pays. Double taxation is when a tax is paid twice on the same income or item. Indirect tax is a tax collected by an intermediary (such as a store) on behalf of the person who actually is required to pay (such as a customer)
Taxable income refers to the base upon which an income tax system imposes tax. [1] In other words, the income over which the government imposed tax. Generally, it includes some or all items of income and is reduced by expenses and other deductions. [2] The amounts included as income, expenses, and other deductions vary by country or system.
A direct, personal consumption tax may take the form of an expenditure tax, that is, an income tax that deducts savings and investments, such as the Hall–Rabushka flat tax. [1] A direct consumption tax may be called an expenditure tax, a cash-flow tax, or a consumed-income tax and can be flat or progressive.
Personal income tax is a tax levied on income earned by individuals, and its rates are adjusted according to the jurisdiction of each country. It serves as a significant source of revenue for the government, which is then utilized for funding public goods and services.
If individuals experience diminishing returns from income, then the optimum distribution of income for society involves a progressive income tax. Mirrlees optimal income tax is a detailed theoretical model of the optimum progressive income tax along these lines. Over the last years the validity of the theory of optimal taxation was discussed by ...
In United States tax law, a corporation is a personal service corporation if it meets all of the following requirements: [2] 1. Its principal activity during the “testing period” is performing personal services (defined later). Generally, the testing period for any tax year is the prior tax year. If the corporation has just been formed, the ...