Tax Warning: You are not logged in. Your IP address will be publicly visible if you make any edits. If you log in or create an account, your edits will be attributed to your username, along with other benefits.Anti-spam check. Do not fill this in! {{Short description|Compulsory contribution to state revenue}} {{Use dmy dates|date=January 2024}} {{Use American English|date=October 2022}} {{other uses}} {{taxation}}A '''tax''' is a compulsory financial charge or some other type of levy imposed on a [[taxpayer]] (an individual or [[legal person|legal entity]]) by a [[government]]al organization in order to collectively fund [[government spending]], [[public expenditure]]s, or as a way to [[Pigouvian tax|regulate]] and reduce negative [[Externality|externalities]].<ref>{{cite encyclopedia |url=http://www.britannica.com/EBchecked/topic/584578/taxation |title=Taxation |encyclopedia=[[Britannica]] | author=Charles E. McLure Jr. |access-date=3 March 2015}}</ref> '''Tax compliance''' refers to policy actions and individual behaviour aimed at ensuring that taxpayers are paying the right amount of tax at the right time and securing the correct tax allowances and tax relief.<ref>HMRC, [https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/923916/CC-FS1a-10-20.pdf About compliance checks], CC/FS1a, accessed 31 January 2022</ref> The first known taxation took place in Ancient Egypt around 3000–2800 BC.<ref name=":1" /> Taxes consist of [[direct tax|direct]] or [[indirect tax]]es and may be paid in money or as its labor equivalent. All countries have a tax system in place, in order to pay for public, common societal, or agreed national needs and for the functions of government. Some countries levy a [[flat tax|flat percentage rate]] of taxation on personal annual income, but most [[progressive tax|scale taxes]] are progressive based on brackets of annual income amounts. Most countries charge a tax on an individual's [[income tax|income]] as well as on [[corporate tax|corporate income]]. Countries or subunits often also impose [[wealth tax]]es, [[inheritance tax]]es, [[Estate tax in the United States|estate taxes]], [[gift tax]]es, [[property tax]]es, [[sales tax]]es, [[use tax]]es, [[environmental tax]]es, [[payroll tax]]es, [[Duty (economics)|duties]] and/or [[tariff]]s. It is also possible to levy a tax on tax, as with a [[gross receipts tax]]. In economic terms ([[circular flow of income]]), taxation transfers wealth from households or businesses to the government. This has effects on [[economic growth]] and [[Welfare definition of economics|economic welfare]] that can be both increased (known as [[fiscal multiplier]]) or decreased (known as [[excess burden of taxation]]). Consequently, taxation is a highly debated topic by some, as although taxation is deemed necessary by general consensus in order for society to function and grow in an orderly and equitable manner through the government provision of [[Public good (economics)|public goods]] and [[Public service|public services]],<ref>{{Cite web |last1=Sciaudone |first1=Christiana |last2=Niser |first2=Lisa |date=24 October 2022 |title=Why Do We Pay Taxes? |url=https://www.businessinsider.com/personal-finance/why-do-we-pay-taxes |access-date=31 October 2022 |website=Business Insider |language=en-US}}</ref><ref>{{Cite web |title=Why it matters in Paying Taxes – Doing Business – World Bank Group |url=https://subnational.doingbusiness.org/en/data/exploretopics/paying-taxes/why-matters |access-date=31 October 2022 |website=subnational.doingbusiness.org}}</ref><ref>{{Cite web |title=Why tax matters |url=https://taxjusticetoolkit.org/why-bother-with-tax/why-tax-matters/ |access-date=31 October 2022 |website=Tax Justice Advocacy |language=en-US}}</ref><ref>{{Cite web |title=The Importance Of Taxes |url=https://richardkleincpa.com/importance-of-taxes/ |access-date=31 October 2022 |language=en-US}}</ref> others such as [[Libertarianism in the United States|libertarians]] and [[Anarcho-capitalism|anarcho-capitalists]] are anti-taxation and denounce taxation broadly or in its entirety, classifying taxation as [[theft]] or [[extortion]] through [[coercion]] along with the use of [[Force (law)|force]]. Within market economies, taxation is considered as the most viable option to operate the government (instead of widespread [[state ownership]] of the [[means of production]]), as taxation enables the government to generate [[revenue]] without heavily interfering with the market and private businesses; taxation preserves the [[efficiency]] and [[productivity]] of the [[private sector]] by allowing individuals and [[Business|businesses]] to make their own economic decisions, engage in flexible [[Production (economics)|production]], [[competition]] and [[innovation]] as a result of [[Market (economics)|market forces]]. Certain countries function as [[tax haven]]s by imposing minimal taxes on the personal income of individuals and on corporate income. These tax havens attract capital from abroad whilst resulting in loss of tax revenues within other non-haven countries (through [[base erosion and profit shifting]]). {{TOC limit}} ==Overview== [[File:Total-tax-revenues-gdp.png|thumb|upright=2|Total revenue from direct and indirect taxes given as share of GDP in 2017<ref>{{cite web |title=Total tax revenues |url=https://ourworldindata.org/grapher/total-tax-revenues-gdp?tab=map |access-date=7 March 2020 |website=Our World in Data}}</ref>|left]] Legal and economic definitions of taxes differ, such that many transfers to governments are not considered taxes by economists. For example, some transfers to the public sector are comparable to prices. Examples include tuition at public universities and fees for utilities provided by local governments. Governments also obtain resources by "creating" money and coins (for example, by printing bills and by minting coins), through voluntary gifts (for example, contributions to public universities and museums), by imposing penalties (such as [[Traffic ticket|traffic fines]]), by borrowing and confiscating [[Crime|criminal]] proceeds. From the view of economists, a tax is a non-penal, yet compulsory transfer of resources from the private to the [[public sector]], levied on a basis of predetermined criteria and without reference to specific benefits received. In modern taxation systems, governments levy taxes in money; but [[In kind|in-kind]] and ''[[corvée]]'' taxation are characteristic of traditional or pre-[[capitalism|capitalist]] states and their functional equivalents. The method of taxation and the government expenditure of taxes raised is often highly debated in [[politics]] and [[economics]]. Tax collection is performed by a government agency such as the [[Internal Revenue Service]] (IRS) in the [[United States]], [[HM Revenue and Customs|His Majesty's Revenue and Customs]] (HMRC) in the [[United Kingdom]], the [[Canada Revenue Agency]] or the [[Australian Taxation Office]]. When taxes are not fully paid, the state may impose civil penalties (such as [[Fine (penalty)|fines]] or [[Asset forfeiture|forfeiture]]) or criminal penalties (such as [[incarceration]]) on the non-paying entity or individual.<ref>See for example {{usc|26|7203}} in the case of U.S. Federal taxes.</ref> ==Purposes and effects== The levying of taxes aims to raise revenue to fund [[government|governing]], to alter prices in order to affect [[demand]], or to regulate some [[Externality|form of cost or benefit]]. States and their functional equivalents throughout history have used the money provided by taxation to carry out many functions. Some of these include expenditures on economic [[infrastructure]] ([[road]]s, [[public transport]]ation, [[sanitation]], [[List of national legal systems|legal systems]], [[public security]], public [[education]], public [[health system]]s), [[military]], scientific [[Research and development|research & development]], [[culture]] and [[the arts]], [[public works]], [[Distribution (economics)|distribution]], [[data collection]] and [[dissemination]], public [[insurance]], and the operation of government itself. A government's ability to raise taxes is called its [[fiscal capacity]]. When [[Government spending|expenditures]] exceed tax [[government revenue|revenue]], a government accumulates [[government debt]]. A portion of taxes may be used to service past debts. Governments also use taxes to fund [[welfare]] and [[public service]]s. These services can include [[education system]]s, [[pension]]s for the [[Old age|elderly]], [[unemployment benefits]], [[transfer payment]]s, [[Subsidy|subsidies]] and [[public transportation]]. [[Electric utility|Energy]], [[water management|water]] and [[waste management]] systems are also common [[Public utility|public utilities]]. According to the proponents of the [[Chartalism|chartalist theory]] of [[money creation]], taxes are not needed for government revenue, as long as the government in question is able to issue [[fiat money]]. According to this view, the purpose of taxation is to maintain the stability of the currency, express public policy regarding the distribution of wealth, subsidizing certain industries or population groups or isolating the costs of certain benefits, such as highways or social security.<ref>{{cite journal |last1=Beardsley|first1=Ruml|title=Taxes for Revenue are Obsolete |journal=American Affairs|volume = VIII|issue = 1|url=http://www.constitution.org/tax/us-ic/cmt/ruml_obsolete.pdf|archive-url=https://web.archive.org/web/20170314025345/http://www.constitution.org/tax/us-ic/cmt/ruml_obsolete.pdf|url-status=dead|archive-date=14 March 2017}}</ref> ==Types== The [[Organisation for Economic Co-operation and Development]] (OECD) publishes an analysis of the tax systems of member countries. As part of such analysis, OECD has developed a definition and system of classification of internal taxes,<ref>{{cite web |url= http://www.oecd.org/daf/mai/pdf/eg2/eg2963e.pdf |title= Definition of Taxes (Note by the Chairman), 1996 |access-date= 22 January 2013}}</ref> generally followed below. In addition, many countries impose taxes ([[tariff]]s) on the import of goods. ===Income Taxation=== ====Income tax==== {{Main|Income tax}} Many jurisdictions tax the income of individuals and of [[business entities]], including [[corporation]]s. Generally, the authorities impose a tax on net profits from a [[business]], on net gains, and on other income. Computation of income subject to tax may be determined under accounting principles used in the jurisdiction, which [[tax law|tax-law]] principles in the jurisdiction may modify or replace. The [[Tax incidence|incidence of taxation]] varies by system, and some systems may be viewed as [[Progressive tax|progressive]] or [[Regressive tax|regressive]]. Rates of tax may vary or be constant (flat) by income level. Many systems allow individuals certain personal allowances and other non-business reductions to taxable income, although business deductions tend to be favored over personal deductions. [[Tax collection agencies|Tax-collection agencies]] often collect [[personal income tax]] on a [[PAYE|pay-as-you-earn]] basis, with corrections made after the end of the [[tax year]]. These corrections take one of two forms: * payments to the government, from taxpayers who have not paid enough during the tax year * [[tax refund]]s from the government to those who have overpaid Income-tax systems often make deductions available that reduce the total tax liability by reducing total taxable income. They may allow losses from one type of income to count against another – for example, a loss on the stock market may be deducted against taxes paid on wages. Other tax systems may isolate the loss, such that business losses can only be deducted against business income tax by carrying forward the loss to later tax years. ====Negative income tax==== {{Main|Negative income tax}} In economics, a negative income tax (abbreviated NIT) is a [[progressive income tax]] system where people earning below a certain amount receive supplemental payment from the government instead of paying taxes to the government. ====Capital gains==== {{Main|Capital gains tax}} Most jurisdictions imposing an income tax treat [[capital gain]]s as part of income subject to tax. Capital gain is generally a gain on sale of capital assets—that is, those assets not held for sale in the ordinary course of business. Capital assets include personal assets in many jurisdictions. Some jurisdictions provide preferential rates of tax or only partial taxation for capital gains. Some jurisdictions impose different rates or levels of capital-gains taxation based on the length of time the asset was held. Because tax rates are often much lower for capital gains than for ordinary income, there is widespread controversy and dispute about the proper definition of capital. ====Corporate==== {{Main|Corporate tax}} Corporate tax refers to income tax, capital tax, net-worth tax, or other taxes imposed on corporations. Rates of tax and the taxable base for corporations may differ from those for individuals or for other taxable persons. ===Social-security contributions=== [[File:GDP per capita PPP vs social contributions 2016.svg|thumb|[[Public finance|General government]] revenue, in % of [[GDP]], from social contributions. For this data, 20% of the [[variance]] of GDP per capita – adjusted for purchasing power parity (PPP) – is explained by revenue from social security and the like.]] Many countries provide publicly funded retirement or healthcare systems.<ref>{{cite web |url= http://www.ssa.gov/policy/docs/progdesc/index.html |title= Social Security Programs Throughout the World on the U.S. Social Security website for links to individual country program descriptions |publisher= Ssa.gov |access-date= 22 January 2013}}</ref> In connection with these systems, the country typically requires employers and/or employees to make compulsory payments.<ref>By contrast, some countries, such as [http://www.ssa.gov/policy/docs/progdesc/ssptw/2010-2011/asia/newzealand.html New Zealand], finance the programs through other taxes.</ref> These payments are often computed by reference to wages or earnings from self-employment. Tax rates are generally fixed, but a different rate may be imposed on employers than on employees.<ref>See for example [http://labour.nic.in/ss/overview.html India Social Security overview] {{webarchive|url=https://web.archive.org/web/20110623221835/http://labour.nic.in/ss/overview.html |date=23 June 2011 }}</ref> Some systems provide an upper limit on earnings subject to the tax. A few systems provide that the tax is payable only on wages above a particular amount. Such upper or lower limits may apply for retirement but not for health-care components of the tax. Some have argued that such taxes on wages are a form of "forced savings" and not really a tax, while others point to redistribution through such systems between generations (from newer cohorts to older cohorts) and across income levels (from higher income levels to lower income-levels) which suggests that such programs are really taxed and spending programs. ===Payroll or workforce=== {{Main|Payroll tax}}Unemployment and similar taxes are often imposed on employers based on the total payroll. These taxes may be imposed in both the country and sub-country levels.<ref>See for example the United States [[Federal Unemployment Tax Act]].</ref> ===Wealth=== A '''wealth tax''' is levied on the total value of personal assets, including: bank deposits, real estate, assets in insurance and pension plans, ownership of [[unincorporated entity|unincorporated businesses]], [[Security (finance)|financial securities]], and personal trusts.<ref name="EWBR">{{Cite web|first=Edward N. |last=Wolff |title=Time for a Wealth Tax? |url=http://bostonreview.net/BR21.1/wolff.html |magazine=Boston Review (Feb–Mar 1996) |year=1996 |archive-url=https://web.archive.org/web/20080512230734/http://bostonreview.net/BR21.1/wolff.html |archive-date=12 May 2008 |url-status=dead}} (recommending a net wealth tax for the US of 0.05% for the first $100,000 in assets to 0.3% for assets over $1,000,000)</ref> Liabilities (primarily mortgages and other loans) are typically deducted, hence it is sometimes called a '''net wealth tax'''. ===Property=== Recurrent property taxes may be imposed on immovable property (real property) and on some classes of movable property. In addition, recurrent taxes may be imposed on the net wealth of individuals or corporations.<ref>Taxes on the net wealth of corporations are often referred to as [[corporate tax]].</ref> Many jurisdictions impose [[estate tax]], [[gift tax]] or other [[inheritance tax]]es on property at death or at the time of gift transfer. Some jurisdictions impose [[Financial transaction tax|taxes on financial or capital transactions]]. ====Property taxes==== {{Main|Property tax|Land value tax}} A property tax (or millage tax) is an [[ad valorem tax|'' ad valorem'' tax]] levy on the value of a property that the owner of the property is required to pay to a government in which the property is situated. Multiple jurisdictions may tax the same property. There are three general varieties of property: land, improvements to land (immovable human-made things, e.g. buildings), and personal property (movable things). [[Real property|Real estate]] or realty is the combination of land and improvements to the land. Property taxes are usually charged on a recurrent basis (e.g., yearly). A common type of property tax is an annual charge on the ownership of [[real estate]], where the tax base is the estimated value of the property. For a period of over 150 years from 1695, the government of England levied a [[window tax]], with the result that one can still see [[listed buildings]] with windows bricked up in order to save their owner's money. A similar tax on hearths existed in France and elsewhere, with similar results. The two most common types of event-driven property taxes are [[stamp duty]], charged upon change of ownership, and [[inheritance tax]], which many countries impose on the estates of the deceased. In contrast with a tax on real estate (land and buildings), a [[land value tax|land-value tax]] (or LVT) is levied only on the unimproved value of the land ("land" in this instance may mean either the economic term, i.e., all-natural resources, or the natural resources associated with specific areas of the Earth's surface: "lots" or "land parcels"). Proponents of the land-value tax argue that it is economically justified, as it will not deter production, distort market mechanisms or otherwise create [[deadweight loss]]es the way other taxes do.<ref>{{Cite book |last1= McCluskey |first1= William J. |last2= Franzsen |first2= Riël C. D. |title= Land Value Taxation: An Applied Analysis |page= 4 |publisher= Ashgate Publishing, Ltd. |year= 2005 |url= https://books.google.com/books?id=jkogP2U4k0AC&pg=PA73|isbn= 978-0-7546-1490-6}}</ref> When real estate is held by a higher government unit or some other entity not subject to taxation by the local government, the taxing authority may receive a [[PILOT (finance)|payment in lieu of taxes]] to compensate it for some or all of the foregone tax revenues. In many jurisdictions (including many American states), there is a general tax levied periodically on residents who own [[personal property]] (personalty) within the jurisdiction. Vehicle and boat registration fees are subsets of this kind of tax. The tax is often designed with blanket coverage and large exceptions for things like food and clothing. Household goods are often exempt when kept or used within the household.<ref name="taxpolicycenter1">{{cite web |url=http://www.taxpolicycenter.org/taxtopics/budget.cfm |title=TPC Tax Topics | Federal Budget |publisher=Taxpolicycenter.org |access-date=27 March 2009}}</ref> Any otherwise non-exempt object can lose its exemption if regularly kept outside the household.<ref name="taxpolicycenter1" /> Thus, tax collectors often monitor newspaper articles for stories about wealthy people who have lent art to museums for public display, because the artworks have then become subject to personal property tax.<ref name="taxpolicycenter1" /> If an artwork had to be sent to another state for some touch-ups, it may have become subject to personal property tax in ''that'' state as well.<ref name="taxpolicycenter1" /> ====Inheritance==== {{Main|Inheritance tax}} Inheritance tax, estate tax, and death tax or duty are the names given to various taxes that arise on the death of an individual. In United States [[tax law]], there is a distinction between an estate tax and an inheritance tax: the former taxes the personal representatives of the deceased, while the latter taxes the beneficiaries of the estate. However, this distinction does not apply in other jurisdictions; for example, if using this terminology UK inheritance tax would be an estate tax. ====Expatriation==== {{Main|Expatriation tax}} An expatriation tax is a tax on individuals who renounce their [[citizenship]] or residence. The tax is often imposed based on a deemed disposition of all the individual's property. One example is the [[United States]] under the ''[[American Jobs Creation Act]]'', where any individual who has a net worth of $2 million or an average income-tax liability of $127,000 who renounces his or her citizenship and leaves the country is automatically assumed to have done so for tax avoidance reasons and is subject to a higher tax rate.<ref>{{cite web |url=https://www.law.cornell.edu/uscode/text/26/877- |title=26 USC 877 |publisher=Law.cornell.edu |access-date=22 January 2013}}</ref> ====Transfer==== {{Main|Transfer tax}} Historically, in many countries, a contract needs to have a stamp affixed to make it valid. The charge for the stamp is either a fixed amount or a percentage of the value of the transaction. In most countries, the stamp has been abolished but [[stamp duty]] remains. Stamp duty is levied in the UK on the purchase of shares and securities, the issue of bearer instruments, and certain partnership transactions. Its modern derivatives, [[stamp duty reserve tax]] and [[stamp duty land tax]], are respectively charged on transactions involving securities and land. Stamp duty has the effect of discouraging speculative purchases of assets by decreasing liquidity. In the [[United States]], transfer tax is often charged by the state or local government and (in the case of real property transfers) can be tied to the recording of the deed or other transfer documents. ====Wealth (net worth)==== {{Main|Wealth tax}} Some countries' governments will require a declaration of the taxpayers' [[balance sheet]] (assets and liabilities), and from that exact a tax on [[net worth]] (assets minus liabilities), as a percentage of the net worth, or a percentage of the net worth exceeding a certain level. The tax may be levied on "[[natural person|natural]]" or "[[juristic person|legal persons.]]" ===Goods and services=== ====Value added==== {{Main|Value added tax}} A value-added tax (VAT), also known as Goods and Services Tax (GST), Single Business Tax, or Turnover Tax in some countries, applies the equivalent of a sales tax to every operation that creates value. To give an example, sheet steel is imported by a machine manufacturer. That manufacturer will pay the VAT on the purchase price, remitting that amount to the government. The manufacturer will then transform the steel into a machine, selling the machine for a higher price to a wholesale distributor. The manufacturer will collect the VAT on the higher price but will remit to the government only the excess related to the "value-added" (the price over the cost of the sheet steel). The wholesale distributor will then continue the process, charging the retail distributor the VAT on the entire price to the retailer, but remitting only the amount related to the distribution mark-up to the government. The last VAT amount is paid by the eventual retail customer who cannot recover any of the previously paid VAT. For a VAT and sales tax of identical rates, the total tax paid is the same, but it is paid at differing points in the process. VAT is usually administrated by requiring the company to complete a VAT return, giving details of VAT it has been charged (referred to as input tax) and VAT it has charged to others (referred to as output tax). The difference between output tax and input tax is payable to the Local Tax Authority. Many tax authorities have introduced automated VAT which has increased [[accountability]] and [[auditability]], by utilizing computer systems, thereby also enabling anti-cybercrime offices as well. {{citation needed|date=September 2016}} ====Sales==== {{Main|Sales tax}} Sales taxes are levied when a commodity is sold to its final consumer. Retail organizations contend that such taxes discourage retail sales. The question of whether they are generally progressive or regressive is a subject of much current debate. People with higher incomes spend a lower proportion of them, so a flat-rate sales tax will tend to be regressive. It is therefore common to exempt food, utilities, and other necessities from sales taxes, since poor people spend a higher proportion of their incomes on these commodities, so such exemptions make the tax more progressive. This is the classic "You pay for what you spend" tax, as only those who spend money on non-exempt (i.e. luxury) items pay the tax. A small number of U.S. states rely entirely on sales taxes for state revenue, as those states do not levy a state income tax. Such states tend to have a moderate to a large amount of tourism or inter-state travel that occurs within their borders, allowing the state to benefit from taxes from people the state would otherwise not tax. In this way, the state is able to reduce the tax burden on its citizens. The U.S. states that do not levy a state income tax are Alaska, Tennessee, Florida, Nevada, South Dakota, Texas,<ref>Although Texas has no individual income tax, the state does impose a [[franchise tax]]—soon to be replaced by a margin tax—on business activity that, while not denominated as an income tax, is in substance a kind of income tax.</ref> Washington state, and Wyoming. Additionally, New Hampshire and Tennessee levy state income taxes only on [[Dividend tax|dividends]] and interest income. Of the above states, only Alaska and New Hampshire do not levy a state sales tax. Additional information can be obtained at the [http://www.taxadmin.org/ Federation of Tax Administrators] website. In the United States, there is a growing movement<ref>{{cite news |url=http://www.economist.com/business/displaystory.cfm?story_id=13110436 |title=Economist.com |work=Economist|date=12 February 2009 |access-date=27 March 2009}}</ref> for the replacement of all federal payroll and income taxes (both corporate and personal) with a national retail sales tax and monthly tax rebate to households of citizens and legal resident aliens. The tax proposal is named [[FairTax]]. In Canada, the federal sales tax is called the Goods and Services Tax (GST) and now stands at 5%. The provinces of British Columbia, Saskatchewan, Manitoba, and Prince Edward Island also have a provincial sales tax [PST]. The provinces of Nova Scotia, New Brunswick, Newfoundland & Labrador, and Ontario have harmonized their provincial sales taxes with the GST—Harmonized Sales Tax [HST], and thus is a full VAT. The province of Quebec collects the Quebec Sales Tax [QST] which is based on the GST with certain differences. Most businesses can claim back the GST, HST, and QST they pay, and so effectively it is the final consumer who pays the tax. ====Excises==== {{Main|Excise}} An excise duty is an [[indirect tax]] imposed upon goods during the process of their manufacture, production or distribution, and is usually proportionate to their quantity or value. Excise duties were first introduced into England in the year 1643, as part of a scheme of revenue and taxation devised by parliamentarian [[John Pym]] and approved by the [[Long Parliament]]. These duties consisted of charges on beer, ale, cider, cherry wine, and tobacco, to which list were afterward added paper, soap, candles, malt, hops, and sweets. The basic principle of excise duties was that they were taxes on the production, manufacture, or distribution of articles which could not be taxed through the [[customs house]], and revenue derived from that source is called excise revenue proper. The fundamental conception of the term is that of a tax on articles produced or manufactured in a country. In the taxation of such articles of luxury as spirits, beer, tobacco, and cigars, it has been the practice to place a certain duty on the importation of these articles (a [[tariff|customs duty]]).<ref name=Quick>{{cite book |last1=Quick |first1=John |last2=Garran |first2=Robert |title=The Annotated Constitution of the Australian Commonwealth |date=1 January 1901 |publisher=Angus & Robertson |location=Australia |page=837 |url=https://books.google.com/books?id=VR-CAAAAIAAJ }}</ref> Excises (or exemptions from them) are also used to modify consumption patterns of a certain area ([[Social engineering (political science)|social engineering]]). For example, a high excise is used to discourage [[alcoholic beverage|alcohol]] consumption, relative to other goods. This may be combined with [[Hypothecated tax|hypothecation]] if the proceeds are then used to pay for the costs of treating illness caused by [[alcohol use disorder]]. Similar taxes may exist on [[tobacco]], [[pornography]], [[Cannabis (drug)|marijuana]] etc., and they may be collectively referred to as "[[sin tax]]es". A [[carbon tax]] is a tax on the consumption of carbon-based non-renewable fuels, such as petrol, diesel-fuel, jet fuels, and natural gas. The object is to reduce the release of carbon into the atmosphere. In the United Kingdom, [[vehicle excise duty]] is an annual tax on vehicle ownership. ===Tariff=== {{Main|Tariff}} An import or export tariff (also called customs duty or impost) is a charge for the movement of goods through a political border. Tariffs discourage [[trade]], and they may be used by governments to protect domestic industries. A proportion of tariff revenues is often hypothecated to pay the government to maintain a navy or border police. The classic ways of cheating a tariff are [[smuggling]] or declaring a false value of goods. Tax, tariff and trade rules in modern times are usually set together because of their common impact on [[industrial policy]], [[investment policy]], and [[agricultural policy]]. A [[trade bloc]] is a group of allied countries agreeing to minimize or eliminate tariffs against trade with each other, and possibly to impose protective tariffs on imports from outside the bloc. A [[customs union]] has a [[common external tariff]], and the participating countries share the revenues from tariffs on goods entering the customs union. In some societies, tariffs also could be imposed by local authorities on the movement of goods between regions (or via specific internal gateways). A notable example is the ''[[likin (taxation)|likin]]'', which became an important revenue source for local governments in the late [[Qing Empire|Qing China]]. ===Other=== ====License fees==== Occupational taxes or license fees may be imposed on businesses or individuals engaged in certain businesses. Many jurisdictions impose a tax on vehicles. ====Poll==== {{Main|Poll tax}} A poll tax, also called a ''per capita tax'', or ''capitation tax'', is a tax that levies a set amount per individual. It is an example of the concept of [[fixed tax]]. One of the earliest taxes mentioned in the [[Bible]] of a half-shekel per annum from each adult Jew (Ex. 30:11–16) was a form of the poll tax. Poll taxes are administratively cheap because they are easy to compute and collect and difficult to cheat. Economists have considered poll taxes economically efficient because people are presumed to be in fixed supply and poll taxes, therefore, do not lead to economic distortions. However, poll taxes are very unpopular because poorer people pay a higher proportion of their income than richer people. In addition, the supply of people is in fact not fixed over time: on average, couples will choose to have fewer children if a poll tax is imposed.<ref>{{cite web |url=http://www.taxpolicycenter.org/TaxFacts/listdocs.cfm?topic2id=60 |title=Tax Facts | Tax Facts Listing |publisher=Taxpolicycenter.org |access-date=27 March 2009}}</ref>{{Failed verification|date=June 2011}} The introduction of a poll tax in medieval England was the primary cause of the 1381 [[Peasants' Revolt]]. Scotland was the first to be used to test the new poll tax in 1989 with England and Wales in 1990. The change from progressive local taxation based on property values to a single-rate form of taxation regardless of ability to pay (the [[Poll tax (Great Britain)|Community Charge]], but more popularly referred to as the Poll Tax), led to widespread refusal to pay and to incidents of civil unrest, known colloquially as the '[[Poll Tax Riots]]'. ====Other==== Some types of taxes have been proposed but not actually adopted in any major jurisdiction. These include: * [[Bank tax]] * [[Financial transaction tax]]es including currency transaction taxes ===Descriptive labels=== ====Ad valorem and per unit==== {{Main|Ad valorem tax|Per unit tax}} An ''ad valorem'' tax is one where the tax base is the value of a good, service, or property. Sales taxes, tariffs, property taxes, inheritance taxes, and value-added taxes are different types of ad valorem tax. An ad valorem tax is typically imposed at the time of a transaction (sales tax or value-added tax (VAT)) but it may be imposed on an annual basis (property tax) or in connection with another significant event (inheritance tax or tariffs). In contrast to ad valorem taxation is a ''per unit'' tax, where the tax base is the quantity of something, regardless of its price. An [[excise tax]] is an example. ====Consumption==== {{Main|Consumption tax}} Consumption tax refers to any tax on non-investment spending and can be implemented by means of a sales tax, consumer value-added tax, or by modifying an income tax to allow for unlimited deductions for investment or savings. ====Environmental==== {{See also|Ecotax|Gas Guzzler Tax|Polluter pays principle|Pigovian tax}} This includes [[natural resources consumption tax]], greenhouse gas tax ([[Carbon tax]]), "sulfuric tax", and others. The stated purpose is to reduce the environmental impact by [[Effect of taxes and subsidies on price|repricing]]. Economists describe environmental impacts as negative [[externalities]]. As early as 1920, [[Pigovian tax|Arthur Pigou]] suggested a tax to deal with externalities (see also the section on [[#Increased economic welfare|Increased economic welfare]] below). The proper implementation of environmental taxes has been the subject of a long-lasting debate. ====Proportional, progressive, regressive, and lump-sum==== An important feature of tax systems is the percentage of the tax burden as it relates to income or consumption. The terms progressive, regressive, and proportional are used to describe the way the rate progresses from low to high, from high to low, or proportionally. The terms describe a distribution effect, which can be applied to any type of tax system (income or consumption) that meets the definition. * A [[progressive tax]] is a tax imposed so that the [[effective tax rate]] increases as the amount to which the rate is applied increases. * The opposite of a progressive tax is a [[regressive tax]], where the effective tax rate decreases as the amount to which the rate is applied increases. This effect is commonly produced where means testing is used to withdraw tax allowances or state benefits. * In between is a [[proportional tax]], where the effective tax rate is fixed, while the amount to which the rate is applied increases. * A lump-sum tax is a tax that is a fixed amount, no matter the change in circumstance of the taxed entity. This in actuality is a regressive tax as those with lower income must use a higher percentage of their income than those with higher income and therefore the effect of the tax reduces as a function of income. The terms can also be used to apply meaning to the taxation of select consumption, such as a [[Luxury tax|tax on luxury goods]] and the exemption of basic necessities may be described as having progressive effects as it increases a tax burden on high end consumption and decreases a tax burden on low end consumption.<ref>{{cite web |url=https://www.irs.gov/app/understandingTaxes/jsp/whys/lp/IWT5L1lp.jsp |title=Internal Revenue Service |publisher=www.irs.gov |access-date=27 March 2009 |url-status=dead |archive-url=https://web.archive.org/web/20070816190910/https://www.irs.gov/app/understandingTaxes/jsp/whys/lp/IWT5L1lp.jsp |archive-date=16 August 2007}}</ref><ref>{{cite web |url=http://concise.britannica.com/ebc/article-9370763/luxury-tax |archive-url=https://archive.today/20120707094214/http://concise.britannica.com/ebc/article-9370763/luxury-tax |url-status=dead |archive-date=7 July 2012 |title=Luxury tax — Britannica Online Encyclopedia |publisher=Concise.britannica.com |access-date=27 March 2009 }}</ref><ref>{{cite journal |jstor=1813222 |title=Clothing Exemptions and Sales Tax Regressivity |first=Jeffrey M. |last=Schaefer |date=1 January 1969 |journal=The American Economic Review |volume=59 |issue=4 |pages=596–99}}</ref> ====Direct and indirect==== {{Main|Direct tax|Indirect tax}} Taxes are sometimes referred to as "direct taxes" or "indirect taxes". The meaning of these terms can vary in different contexts, which can sometimes lead to confusion. An economic definition, by Atkinson, states that "...direct taxes may be adjusted to the individual characteristics of the taxpayer, whereas indirect taxes are levied on transactions irrespective of the circumstances of buyer or seller."<ref>{{cite journal |last1=Atkinson |first1=A. B. |year=1977 |title=Optimal Taxation and the Direct Versus Indirect Tax Controversy |journal=Can. J. Econ. |volume=590 |page=592}}</ref> According to this definition, for example, income tax is "direct", and sales tax is "indirect". In law, the terms may have different meanings. In U.S. constitutional law, for instance, direct taxes refer to [[Tax per head|poll taxes]] and [[property tax]]es, which are based on simple existence or ownership. Indirect taxes are imposed on events, rights, privileges, and activities.<ref>{{cite web |url=http://www.investorguide.com/igu-article-1138-tax-basics-what-is-difference-between-direct-and-indirect-tax.html |title=What is Difference Between Direct and Indirect Tax? |publisher=Investor Guide |access-date=28 October 2011 |archive-date=22 June 2013 |archive-url=https://web.archive.org/web/20130622031929/http://www.investorguide.com/article/11164/the-difference-between-direct-tax-and-indirect-tax-igu/ |url-status=dead }}</ref> Thus, a tax on the sale of the property would be considered an indirect tax, whereas the tax on simply owning the property itself would be a direct tax. ===Fees and effective=== Governments may charge user [[fee]]s, tolls, or other types of assessments in exchange of particular goods, services, or use of property. These are generally not considered taxes, as long as they are levied as payment for a direct benefit to the individual paying.<ref>{{cite web |url=http://www.ncsu.edu/project/calscommblogs/economic/archives/2007/05/the_difference.html |title=Taxes versus fees |publisher=Ncsu.edu |date=2 May 2007 |access-date=22 January 2013 |url-status=dead |archive-url=https://web.archive.org/web/20121008032841/http://www.ncsu.edu/project/calscommblogs/economic/archives/2007/05/the_difference.html |archive-date=8 October 2012 }}</ref> Such fees include: * Tolls: a fee charged to travel via a [[Toll road|road]], [[Toll bridge|bridge]], [[Toll tunnel|tunnel]], [[canal]], [[waterway]] or other transportation facilities. Historically tolls have been used to pay for public bridge, road, and tunnel projects. They have also been used in privately constructed transport links. The toll is likely to be a fixed charge, possibly graduated for vehicle type, or for distance on long routes. * User fees, such as those charged for use of parks or other government-owned facilities. * Ruling fees charged by governmental agencies to make determinations in particular situations. Some scholars refer to certain economic effects as taxes, though they are not levies imposed by governments. These include: * [[Inflation tax]]: the economic disadvantage suffered by holders of [[cash and cash equivalents]] in one denomination of [[currency]] due to the effects of [[expansionary monetary policy]]<ref>Some economists{{who|date=September 2010}} hold that the inflation tax affects the lower and middle classes more than the rich, as they hold a larger fraction of their income in cash, they are much less likely to receive the newly created monies before the market has adjusted with inflated prices, and more often have fixed incomes, [[wages]] or [[pensions]]. Some argue that inflation is a [[regressive tax|regressive]] [[consumption tax]]. Also see Andrés Erosa and Gustavo Ventura, "[http://www.ssc.uwo.ca/economics/econref/workingpapers/researchreports/wp2000/wp2000_1.pdf On inflation as a regressive consumption tax] {{webarchive|url=https://web.archive.org/web/20080910064531/http://www.ssc.uwo.ca/economics/econref/workingpapers/researchreports/wp2000/wp2000_1.pdf |date=10 September 2008 }}". Some{{who|date=June 2011}} claim there are systemic effects of an expansionary monetary policy, which are also definitively taxing, imposing a financial charge on some as a result of the policy. Because the effects of monetary expansion or [[counterfeiting]] are never uniform over an entire economy, the policy influences capital transfers in the market, creating [[economic bubbles]] where the new monies are first introduced. Economic bubbles increase market instability and therefore increase investment risk, creating the conditions common to a [[recession]]. This particular tax can be understood to be levied on future generations that would have benefited from economic growth, and it has a 100% transfer cost (so long as people are not acting against their interests, increased uncertainty benefits, no-one). One example of a strong supporter of this tax was the former [[Federal Reserve]] chair [[Beardsley Ruml]].</ref> * [[Financial repression]]: Government policies such as interest-rate caps on government debt, financial regulations such as reserve requirements and capital controls, and barriers to entry in markets where the government owns or controls businesses.<ref> See for example Reinhart, Carmen M. and Rogoff, Kenneth S., ''This Time is Different''. Princeton and Oxford: Princeton University Press, 2008 (p. 143), [https://www.imf.org/external/np/seminars/eng/2011/res2/pdf/crbs.pdf The Liquidation of Government Debt, Reinhart, Carmen M. & Sbrancia, M. Belen, p. 19], {{cite journal |last1=Giovannini |first1=Alberto |last2=de Melo |first2=Martha |year=1993 |title=Government Revenue from Financial Repression |journal=The American Economic Review |volume=83 |issue=4 |pages=953–963}} </ref> ==History== [[File:Wells egyptian peasants taxes.jpg|thumb|Egyptian [[peasant]]s seized for [[tax noncompliance|non-payment of taxes]]. ([[Old Kingdom|Pyramid Age]])]] The first known system of taxation was in [[Ancient Egypt]] around 3000–2800 BC, in the [[First Dynasty of Egypt|First Dynasty]] of the [[Old Kingdom of Egypt]].<ref name=":1">[http://www.upenn.edu/almanac/v48/n28/AncientTaxes.html Taxes in the Ancient World], University of Pennsylvania Almanac, ''Vol. 48, No. 28, 2 April 2002''</ref> The earliest and most widespread forms of taxation were the [[corvée]] and the [[tithe]]. The corvée was [[forced labor]] provided to the state by peasants too poor to pay other forms of taxation (''labor'' in [[Ancient Egyptian literature|ancient Egyptian]] is a synonym for taxes).<ref name=burg>{{cite book |title=A World History of Tax Rebellions |author=David F. Burg |year=2004 |pages=vi–viii |url=https://books.google.com/books?id=T91k6HAODzAC&pg=PP1|publisher=Taylor & Francis |isbn=9780415924986}}</ref> Records from the time document that the Pharaoh would conduct a biennial tour of the kingdom, collecting tithes from the people. Other records are granary receipts on [[Ostracon#Egyptian limestone and potsherd ostraca|limestone flakes]] and papyrus.<ref>Olmert, Michael (1996). ''Milton's Teeth and Ovid's Umbrella: Curiouser & Curiouser Adventures in History'', p. 41. Simon & Schuster, New York. {{ISBN|0-684-80164-7}}.</ref> Early taxation is also described in the [[Bible]]. In [[Book of Genesis|Genesis]] (chapter 47, verse 24 – the [[New International Version]]), it states "But when the crop comes in, give a fifth of it to [[Pharaoh]]. The other four-fifths you may keep as seed for the fields and as food for yourselves and your households and your children". Samgharitr is the name mentioned for the Tax collector in the Vedic texts.<ref>{{Cite book|last=Prasad|first=R. U. S.|url=https://books.google.com/books?id=EpTaDwAAQBAJ&q=atharvaveda+palagala&pg=PA108|title=The Rig-Vedic and Post-Rig-Vedic Polity (1500 BCE-500 BCE)|date=6 October 2020|publisher=Vernon Press|isbn=978-1-64889-001-7|language=en}}</ref> In [[Hattusa]], the capital of the [[Hittite Empire]], grains were collected as a tax from the surrounding lands, and stored in silos as a display of the king's wealth.<ref>{{cite journal |url=https://www.nature.com/articles/d41586-020-02630-9 |title=Ancient tax collectors amassed a fortune — until it went up in smoke |journal=Nature |date=14 September 2020 |volume=585 |issue=7826 |page=485 |doi=10.1038/d41586-020-02630-9 |bibcode=2020Natur.585Q.485. |s2cid=221720764 }}</ref> In the [[Achaemenid Empire|Persian Empire]], a regulated and sustainable tax system was introduced by [[Darius I the Great]] in 500 BC;<ref>{{cite web |url=http://www.1902encyclopedia.com/D/DAR/darius-i-the-great.html |title=Darius I (Darius the Great), King of Persia (from 521 BC) |publisher=1902encyclopedia.com |access-date=22 January 2013}}</ref> the [[Persia]]n system of taxation was tailored to each [[Satrapy]] (the area ruled by a Satrap or provincial governor). At differing times, there were between 20 and 30 Satrapies in the Empire and each was assessed according to its supposed productivity. It was the responsibility of the Satrap to collect the due amount and to send it to the treasury, after deducting his expenses (the expenses and the power of deciding precisely how and from whom to raise the money in the province, offer maximum opportunity for rich pickings). The quantities demanded from the various provinces gave a vivid picture of their economic potential. For instance, [[Babylon]] was assessed for the highest amount and for a startling mixture of commodities; 1,000 [[Talent (measurement)|silver talents]] and four months supply of food for the army. [[India]], a province fabled for its gold, was to supply gold dust equal in value to the very large amount of 4,680 silver talents. Egypt was known for the wealth of its crops; it was to be the granary of the Persian Empire (and, later, of the [[Roman Empire]]) and was required to provide 120,000 measures of grain in addition to 700 talents of silver.<ref>{{cite web |url=http://www.historyworld.net/wrldhis/PlainTextHistories.asp?historyid=aa65 |title=History of Iran (Persia) |publisher=Historyworld.net |access-date=22 January 2013}}</ref> This tax was exclusively levied on Satrapies based on their lands, productive capacity and tribute levels.<ref>''The Theocratic Ideology of the Chronicler'' – by Jonathan E. Dyck – p. 96 – Brill, 1998</ref> The [[Rosetta Stone]], a tax concession issued by [[Ptolemy V]] in 196 BC and written in three languages "led to the most famous decipherment in history—the cracking of hieroglyphics".<ref>{{cite web |url=https://www.bbc.co.uk/ahistoryoftheworld/about/transcripts/episode33// |title=History of the World in 100 Objects:Rosetta Stone |author=British Museum |publisher=BBC}}</ref> In the [[Roman Republic]], [[Taxation in ancient Rome|taxes were collected]] from individuals at the rate of between 1% and 3% of the assessed value of their total property. However, since it was extremely difficult to facilitate the collection of the tax, the government auctioned it every year. The winning tax farmers (called ''[[publican]]i'') paid the tax revenue to the government in advance and then kept the taxes collected from individuals. The ''publicani'' paid the tax revenue in coins, but collected the taxes using other [[medium of exchange|exchange media]], thus relieving the government of the work to carry out the currency conversion themselves. The revenue payment essentially worked as a loan to the government, which paid interest on it. Although this scheme was a profitable enterprise for the government as well as the ''publicani'', it was later replaced by a direct tax system by the emperor [[Augustus]]; after which, each province was obliged to pay 1% tax on wealth and a flat rate on each adult. This brought about regular census and shifted the tax system more towards taxing an individual's income rather than wealth.<ref>{{Cite web |title=Roman Taxes – Taxation in the Roman Empire {{!}} UNRV |url=https://www.unrv.com/economy/roman-taxes.php#google_vignette |access-date=3 April 2022 |website=www.unrv.com}}</ref> Islamic rulers imposed [[Zakat]] (a tax on Muslims) and [[Jizya]] (a [[Tax per head|poll tax]] on conquered non-Muslims). In India this practice began in the 11th century. ===Trends=== Numerous records of government tax collection in Europe since at least the 17th century are still available today. But taxation levels are hard to compare to the size and flow of the economy since [[gross domestic product|production]] numbers are not as readily available. Government expenditures and revenue in France during the 17th century went from about 24.30 million ''[[livres]]'' in 1600–10 to about 126.86 million ''livres'' in 1650–59 to about 117.99 million ''livres'' in 1700–10 when [[government debt]] had reached 1.6 billion ''livres''. In 1780–89, it reached 421.50 million ''livres''.<ref>Hoffman, Phillipe and Kathryn Norberg (1994), ''Fiscal Crises, Liberty, and Representative Government, 1450–1789'', p. 238.</ref> Taxation as a percentage of production of final goods may have reached 15–20% during the 17th century in places such as [[France]], the [[Netherlands]], and [[Scandinavia]]. During the war-filled years of the eighteenth and early nineteenth century, tax rates in Europe increased dramatically as war became more expensive and governments became more centralized and adept at gathering taxes. This increase was greatest in England, [[Peter Mathias]] and Patrick O'Brien found that the tax burden increased by 85% over this period. Another study confirmed this number, finding that per capita tax revenues had grown almost sixfold over the eighteenth century, but that steady economic growth had made the real burden on each individual only double over this period before the industrial revolution. [[Effective tax rate]]s were higher in Britain than France in the years before the [[French Revolution]], twice in per capita income comparison, but they were mostly placed on international trade. In France, taxes were lower but the burden was mainly on landowners, individuals, and internal trade and thus created far more resentment.<ref>Hoffman, Phillipe and Kathryn Norberg (1994), ''Fiscal Crises, Liberty, and Representative Government, 1450–1789'', p. 300 .</ref> Taxation as a percentage of [[Gross domestic product|GDP]] 2016 was 45.9% in [[Denmark]], 45.3% in France, 33.2% in the [[United Kingdom]], 26% in the [[United States]], and among all [[OECD]] members an average of 34.3%.<ref>{{Cite web|url=https://www.oecd.org/tax/revenue-statistics-2522770x.htm|title=Revenue Statistics 2020 | en | OECD|website=www.oecd.org}}</ref><ref>[https://www.forbes.com/global/2004/0524/074chart2.html Tax/Spending Burden], Forbes magazine, ''05-24-04''</ref> ===Forms=== In monetary economies prior to fiat banking, a critical form of taxation was [[seigniorage]], the tax on the creation of money. Other obsolete forms of taxation include: * [[Scutage]], which is paid in lieu of military service; strictly speaking, it is a commutation of a non-tax obligation rather than a tax as such but functioning as a tax in practice. * [[Tallage]], a tax on feudal dependents. * [[Tithe]], a tax-like payment (one-tenth of one's earnings or agricultural produce), paid to the Church (and thus too specific to be a tax in strict technical terms). This should not be confused with the modern practice of the same name which is normally voluntary. * (Feudal) aids, a type of tax or due that was paid by a vassal to his lord during feudal times. * [[Danegeld]], a medieval land tax originally raised to pay off raiding Danes and later used to fund military expenditures. * [[Carucage]], a tax which replaced the Danegeld in England. * [[Tax farming]], the principle of assigning the responsibility for tax revenue collection to private citizens or groups. * [[Socage]], a feudal tax system based on land rent. * [[Burgage]], a feudal tax system based on land rent. Some principalities taxed windows, doors, or cabinets to reduce consumption of imported glass and hardware. Armoires, [[hutch (furniture)|hutches]], and [[wardrobes]] were employed to evade taxes on doors and cabinets. In some circumstances, taxes are also used to enforce public policy like congestion charge (to cut road traffic and encourage public transport) in London. In Tsarist Russia, [[beard tax|taxes]] were clamped on beards. Today, one of the most-complicated taxation systems worldwide is in Germany. Three-quarters of the world's taxation literature refers to the German system.{{Citation needed|date=May 2010}} Under the German system, there are 118 laws, 185 forms, and 96,000 regulations, spending [[Euro|€]]3.7 billion to collect the income tax.{{citation needed|date=January 2013}} In the United States, the [[Internal Revenue Service|IRS]] has about [[IRS tax forms|1,177 forms and instructions]],<ref>{{cite web |title=IRS pick list |url=https://apps.irs.gov/app/picklist/list/formsInstructions.html |publisher=IRS |access-date=21 January 2013}}</ref> 28.4111 megabytes of [[Internal Revenue Code]]<ref>{{cite web |title=title 26 US Code |url=http://uscode.house.gov/download/title_26.shtml |publisher=US House of Reperesentitives |access-date=21 January 2013}}</ref> which contained 3.8 million words as of 1 February 2010,<ref>{{cite web |last=Caron |first=Paul L. |title=How Many Words Are in the Internal Revenue Code? |url=http://taxprof.typepad.com/taxprof_blog/2011/10/slate-how-many.html |access-date=21 January 2013 |date=28 October 2011}}</ref> numerous tax regulations in the [[Code of Federal Regulations]],<ref>{{cite web |url=http://www.gpo.gov/fdsys/search/pagedetails.action?collectionCode=CFR&searchPath=Title+26%2FChapter+I&granuleId=CFR-2012-title26-vol1-toc-id2&packageId=CFR-2012-title26-vol1&oldPath=Title+26%2FTOC&fromPageDetails=true&collapse=true&ycord=0 |title=26 CFR – Table of Contents |publisher=Gpo.gov |date=1 April 2012 |access-date=22 January 2013}}</ref> and supplementary material in the [[Internal Revenue Bulletin]].<ref>{{cite web |title=Internal Revenue Bulletin: 2012–23 |url=https://www.irs.gov/irb/2012-23_IRB/ar08.html |publisher=Internal Revenue Service |access-date=7 June 2012 |date=4 June 2012}}</ref> Today, governments in more advanced economies (i.e. Europe and North America) tend to rely more on direct taxes, while developing economies (i.e. several African countries) rely more on indirect taxes. ==Economic effects== [[File:GDP per capita PPP vs taxes 2016.svg|thumb| [[Public finance]] revenue from taxes in % of [[GDP]]. For this data, 32% of the [[variance]] of GDP per capita – adjusted for purchasing power parity (PPP) – is explained by revenue from social security and the like.]] In economic terms, taxation transfers [[wealth]] from households or businesses to the government of a nation. Adam Smith writes in ''The Wealth of Nations'' that :"…the economic incomes of private people are of three main types: rent, profit, and wages. Ordinary taxpayers will ultimately pay their taxes from at least one of these revenue sources. The government may intend that a particular tax should fall exclusively on rent, profit, or wages – and that another tax should fall on all three private income sources jointly. However, many taxes will inevitably fall on resources and persons very different from those intended … Good taxes meet four major criteria. They are (1) proportionate to incomes or abilities to pay (2) certain rather than arbitrary (3) payable at times and in ways convenient to the taxpayers and (4) cheap to administer and collect."<ref>{{cite book|last=Smith|first=Adam|title=The Wealth of Nations: A Translation into Modern English|url=https://books.google.com/books?id=hj2gCQAAQBAJ|year=2015|publisher=Industrial Systems Research|isbn=978-0-906321-70-6|page=429}}</ref> The side-effects of taxation (such as economic distortions) and theories about how best to tax are an important subject in [[microeconomics]]. Taxation is almost never a simple transfer of wealth. Economic theories of taxation approach the question of how to maximize [[Welfare economics|economic welfare]] through taxation. A 2019 study looking at the impact of tax cuts for different income groups, it was tax cuts for low-income groups that had the greatest positive impact on employment growth.<ref name=":0">{{Cite journal|last=Zidar|first=Owen|date=30 October 2018|title=Tax Cuts for Whom? Heterogeneous Effects of Income Tax Changes on Growth and Employment|journal=Journal of Political Economy|volume=127|issue=3|pages=1437–1472|doi=10.1086/701424|s2cid=158844554|issn=0022-3808|url=http://www.nber.org/papers/w21035.pdf}}</ref> Tax cuts for the wealthiest top 10% had a small impact.<ref name=":0" /> ===Incidence=== {{Main|Tax incidence}} {{See also|Effect of taxes and subsidies on price}} Law establishes from whom a tax is collected. In many countries, taxes are imposed on businesses (such as [[corporate tax]]es or portions of [[payroll tax]]es). However, who ultimately pays the tax (the tax "burden") is determined by the marketplace as taxes become [[Effect of taxes and subsidies on price|embedded]] into production costs. Economic theory suggests that the economic effect of tax does not necessarily fall at the point where it is legally levied. For instance, a tax on employment paid by employers will impact the employee, at least in the long run. The greatest share of the tax burden tends to fall on the most inelastic factor involved—the part of the transaction which is affected least by a change in price. So, for instance, a tax on wages in a town will (at least in the long run) affect property-owners in that area. Depending on how quantities supplied and demanded to vary with price (the "elasticities" of supply and demand), a tax can be absorbed by the seller (in the form of lower pre-tax prices), or by the buyer (in the form of higher post-tax prices). If the elasticity of supply is low, more of the tax will be paid by the supplier. If the elasticity of demand is low, more will be paid by the customer; and, contrariwise for the cases where those elasticities are high. If the seller is a competitive firm, the tax burden is distributed over the [[factors of production]] depending on the elasticities thereof; this includes workers (in the form of lower wages), capital investors (in the form of loss to shareholders), landowners (in the form of lower rents), entrepreneurs (in the form of lower wages of superintendence) and customers (in the form of higher prices). To show this relationship, suppose that the market price of a product is $1.00 and that a $0.50 tax is imposed on the product that, by law, is to be collected from the seller. If the product has an elastic demand, a greater portion of the tax will be absorbed by the seller. This is because goods with elastic demand cause a large decline in quantity demanded a small increase in price. Therefore, in order to stabilize sales, the seller absorbs more of the additional tax burden. For example, the seller might drop the price of the product to $0.70 so that, after adding in the tax, the buyer pays a total of $1.20, or $0.20 more than he did before the $0.50 tax was imposed. In this example, the buyer has paid $0.20 of the $0.50 tax (in the form of a post-tax price) and the seller has paid the remaining $0.30 (in the form of a lower pre-tax price).<ref>Parkin, Michael (2006), ''Principles of Microeconomics'', p. 134.</ref> ===Increased economic welfare=== ====Government spending==== The purpose of taxation is to provide for [[government spending]] without [[inflation]]. The provision of [[Public good (economics)|public goods]] such as [[road]]s and other [[infrastructure]], [[school]]s, a [[social safety net]], public [[health system]]s, national defense, [[law enforcement]], and a [[Judiciary|courts system]] increases the [[Welfare definition of economics|economic welfare]] of society if the benefit outweighs the costs involved. ====Pigovian==== The existence of a tax can ''increase'' economic efficiency in some cases. If there is a [[negative externality]] associated with a good (meaning that it has negative effects not felt by the consumer) then a free market will trade too much of that good. By taxing the good, the government can raise revenue to address specific problems while increasing overall welfare. The goal is to tax people when they are creating societal costs in addition to their personal costs. By taxing goods with negative externalities, the government attempts to increase economic efficiency while raising revenues. This type of tax is called a [[Pigovian tax]], after economist [[Arthur Cecil Pigou|Arthur Pigou]] who wrote about it in his 1920 book "The Economics of Welfare".<ref>{{Cite news|last=Frank|first=Robert H.|date=5 January 2013|title=Heads, You Win. Tails, You Win, Too.|language=en-US|work=The New York Times|url=https://www.nytimes.com/2013/01/06/business/pigovian-taxes-may-offer-economic-hope.html |url-access=registration |access-date=10 September 2021|issn=0362-4331}}</ref> Pigovian taxes might target the undesirable production of [[greenhouse gas]]es which cause [[climate change]] (namely a [[carbon tax]]), polluting fuels (such as [[petrol]]), water or air pollution (namely an [[ecotax]]), goods which incur public healthcare costs (such as [[Alcoholic drink|alcohol]] or [[tobacco]]), and excess demand of certain public goods (such as [[congestion charging|traffic congestion pricing]]). The idea is to aim taxes at people that cause an above-average amount of societal [[harm]] so the [[free market]] incorporates all [[cost]]s as opposed to only personal costs, with the benefit of lowering the overall tax burden for people who cause less societal harm. ====Reduced inequality==== Progressive taxation generally reduces [[economic inequality]], even when the tax revenue is not [[Redistribution of income and wealth|redistributed]] from higher-income individuals to lower-income individuals.<ref>{{Cite web|title=How do taxes affect income inequality?|url=https://www.taxpolicycenter.org/briefing-book/how-do-taxes-affect-income-inequality |date=May 2020 |access-date=22 September 2021|website=Tax Policy Center|language=en}}</ref><ref>{{Cite book|url=https://www.oecd-ilibrary.org/economics/economic-policy-reforms-2012_growth-2012-en|title=Economic Policy Reforms 2012: Going for Growth|date=24 February 2012|publisher=OECD|isbn=978-92-64-16825-1|language=en|doi=10.1787/growth-2012-en |url-status=live |archive-url=https://web.archive.org/web/20231018164559/https://www.oecd-ilibrary.org/economics/economic-policy-reforms-2012_growth-2012-en |archive-date= 18 October 2023 }}</ref> However, in a highly specific condition, progressive taxation increases [[economic inequality]] when lower-income individuals consume [[goods]] and [[Service (economics)|services]] produced by higher-income individuals, who in turn consume only from other higher-income individuals ([[trickle-up effect]]).<ref>{{Cite web|title=Could More Progressive Taxes Increase Income Inequality? |url=https://www.stlouisfed.org/on-the-economy/2020/may/could-more-progressive-taxes-increase-income-inequality|access-date=22 September 2021|website=St. Louis Fed |date=19 May 2020 |first1=Laura |last1=Jackson |first2=Christopher |last2=Otrok |first3=Michael T. |last3=Owyang }}</ref> ===Reduced economic welfare=== Most taxes (see [[#Deadweight costs|below]]) have [[side effects]] that reduce [[economic welfare]], either by mandating unproductive labor (compliance costs) or by creating distortions to economic incentives ([[deadweight loss]] and [[perverse incentive]]s).{{citation needed|date=October 2012}} ====Cost of compliance==== Although governments must spend money on tax collection activities, some of the costs, particularly for keeping records and filling out forms, are borne by businesses and by private individuals. These are collectively called costs of compliance. More complex tax systems tend to have higher compliance costs. This fact can be used as the basis for practical or moral arguments in favor of tax simplification (such as the [[FairTax]] or [[OneTax]], and some [[flat tax]] proposals). ====Deadweight costs==== [[File:Tax deadweight.gif|thumb|upright=1.35|Diagram illustrating deadweight costs of taxes]] In the absence of negative [[Externality|externalities]], the introduction of taxes into a market reduces [[economic efficiency]] by causing [[deadweight loss]]. In a competitive market, the [[price]] of a particular [[Good (economics)|economic good]] adjusts to ensure that all trades which benefit both the buyer and the seller of a good occur. The introduction of a tax causes the price received by the seller to be less than the cost to the buyer by the amount of the tax. This causes fewer transactions to occur, which reduces [[welfare economics|economic welfare]]; the individuals or businesses involved are less well off than before the tax. The [[tax burden]] and the amount of deadweight cost is dependent on the [[elasticity (economics)|elasticity]] of supply and demand for the good taxed. Most taxes—including [[income tax]] and [[sales tax]]—can have significant deadweight costs. The only way to avoid deadweight costs in an economy that is generally competitive is to refrain from taxes that change [[economic incentive]]s. Such taxes include the [[land value tax]],<ref>{{cite book|author1=William J. McCluskey|author2=Riël C. D. Franzsen|title=Land Value Taxation: An Applied Analysis|url=https://books.google.com/books?id=jkogP2U4k0AC&pg=PA73|year=2005|publisher=Ashgate|isbn=978-0-7546-1490-6|page=73}}</ref> where the tax is on a good in completely inelastic supply. By taxing the value of unimproved land as opposed to what's built on it, a land value tax does not increase taxes on landowners for improving their land. This is opposed to traditional property taxes which reward land abandonment and disincentivize construction, maintenance, and repair. Another example of a tax with few deadweight costs is a [[lump sum tax]] such as a [[Tax per head|poll tax]] (head tax) which is paid by all adults regardless of their choices. Arguably a [[windfall profits tax]] which is entirely unanticipated can also fall into this category. Deadweight loss does not account for the effect taxes have in leveling the business playing field. Businesses that have more money are better suited to fend off competition. It is common that an industry with a small amount of very large corporations has a very high barrier of entry for new entrants coming into the marketplace. This is due to the fact that the larger the corporation, the better its position to negotiate with suppliers. Also, larger companies may be able to operate at low or even negative profits for extended periods of time, thus pushing out competition. More progressive taxation of profits, however, would reduce such barriers for new entrants, thereby increasing competition and ultimately benefiting consumers.<ref>{{Cite journal |first1=Reuven S. |last1=Avi-Yonah |date=April 2002 |title=Why Tax the Rich? Efficiency, Equity, and Progressive Taxation |journal=The Yale Law Journal |volume=111 |issue=6 |pages=1391–416 |jstor=797614 |doi=10.2307/797614|author2-link=Joel Slemrod |last2=Slemrod |first2=Joel B.|s2cid=47005504 |url=https://digitalcommons.law.yale.edu/cgi/viewcontent.cgi?article=4587&context=ylj }}</ref> ====Perverse incentives==== Complexity of the tax code in developed economies offers perverse [[tax incentive]]s. The more details of [[tax policy]] there are, the more opportunities for legal [[tax avoidance]] and illegal [[tax evasion]]. These not only result in lost revenue but involve additional costs: for instance, payments made for tax advice are essentially deadweight costs because they add no wealth to the economy. [[Perverse incentive]]s also occur because of non-taxable 'hidden' transactions; for instance, a sale from one company to another might be liable for [[sales tax]], but if the same goods were shipped from one branch of a corporation to another, no tax would be payable. To address these issues, economists often suggest simple and transparent tax structures that avoid providing loopholes. Sales tax, for instance, can be replaced with a [[value added tax]] which disregards intermediate transactions. ==In developing countries== Following Nicolas Kaldor's research, public finance in developing countries is strongly tied to [[state capacity]] and financial development. As state capacity develops, states not only increase the level of taxation but also the pattern of taxation. With larger tax bases and the diminishing importance of trading tax, income tax gains more importance.<ref>{{cite journal |last1=Stern |first1=Nicolas |last2=Burgess |first2=Robin |title=Taxation and Development |journal=Journal of Economic Literature}}</ref> According to Tilly's argument, state capacity evolves as a response to the emergence of war. War is an incentive for states to raise taxes and strengthen states' capacity. Historically, many taxation breakthroughs took place during wartime. The introduction of income tax in Britain was due to the Napoleonic War in 1798. The US first introduced income tax during the Civil War.<ref name="Besley & Persson">{{cite journal |last1=Besley |first1=Timothy |last2=Persson |first2=Torsten |author1-link=Tim Besley |author2-link=Torsten Persson |title=The Origins of State Capacity: Property Rights, Taxation, and Politics |journal=American Economic Review |date=September 2009 |volume=99 |issue=4 |pages=1218–1244 |issn= 0002-8282 |doi=10.1257/aer.99.4.1218 |url=http://eprints.lse.ac.uk/33768/1/The_origins_of_state_capacity_property_rights,_taxation,_and_politics(lsero).pdf}}</ref> Taxation is constrained by the fiscal and legal capacities of a country.<ref name="Besley & Persson" /> Fiscal and legal capacities also complement each other. A well-designed tax system can minimize efficiency loss and boost economic growth. With better compliance and better support to financial institutions and individual property, the government will be able to collect more tax. Although wealthier countries have higher tax revenue, economic growth does not always translate to higher tax revenue. For example, in India, increases in exemptions lead to the stagnation of income tax revenue at around 0.5% of GDP since 1986.<ref>{{cite journal |last1=Piketty |first1=Thomas |last2=Qian |first2=Nancy |author1-link=Thomas Piketty |author2-link=Nancy Qian |title=Income Inequality and Progressive Income Taxation in China and India, 1986–2015 |journal=American Economic Journal: Applied Economics |date=April 2009 |volume=1 |issue=2 |pages=53–63 |doi=10.1257/app.1.2.53|s2cid=27331525 }}</ref> Researchers for [[EPS PEAKS]]<ref name="Economics Topic Guide Taxation and Revenue">{{cite web |url=http://partnerplatform.org/?c158bbx3 |title=Economics Topic Guide Taxation and Revenue |author=Hazel Granger |publisher=EPS PEAKS |year=2013}}</ref> stated that the core purpose of taxation is revenue mobilization, providing resources for National Budgets, and forming an important part of macroeconomic management. They said [[economic theory]] has focused on the need to "optimize" the system through balancing efficiency and equity, understanding the impacts on production, and consumption as well as distribution, [[Redistribution (economics)|redistribution]], and [[welfare]]. They state that taxes and tax relief have also been used as a tool for behavioral change, to influence [[investment (macroeconomics)|investment]] decisions, [[labor supply]], [[Consumption (economics)|consumption patterns]], and positive and negative economic spill-overs (externalities), and ultimately, the promotion of economic growth and development. The tax system and its administration also play an important role in state-building and governance, as a principal form of "social contract" between the state and citizens who can, as taxpayers, exert accountability on the state as a consequence. The researchers wrote that domestic revenue forms an important part of a developing country's public financing as it is more stable and predictable than [[Official development assistance|Overseas Development Assistance]] and necessary for a country to be self-sufficient. They found that domestic revenue flows are, on average, already much larger than ODA, with aid worth less than 10% of collected taxes in Africa as a whole. However, in a quarter of African countries Overseas Development Assistance does exceed tax collection,<ref>Africa Economic Outlook 2010, Part 2: Public Resource Mobilisation and Aid in Africa, AfDB/OECD (2010)</ref> with these more likely to be non-resource-rich countries. This suggests countries making the most progress replacing aid with tax revenue tend to be those benefiting disproportionately from rising prices of energy and commodities. The author<ref name="Economics Topic Guide Taxation and Revenue" /> found tax revenue as a percentage of GDP varying greatly around a global average of 19%.<ref>According to IMF data for 2010, from Revenue Data for IMF Member Countries, as of 2011, (unpublished)</ref> This data also indicates countries with higher GDP tend to have higher tax to GDP ratios, demonstrating that higher income is associated with more than proportionately higher tax revenue. On average, high-income countries have tax revenue as a percentage of GDP of around 22%, compared to 18% in middle-income countries and 14% in low-income countries. In high-income countries, the highest tax-to-GDP ratio is in [[Denmark]] at 47% and the lowest is in Kuwait at 0.8%, reflecting low taxes from strong oil revenues. The long-term average performance of tax revenue as a share of GDP in low-income countries has been largely stagnant, although most have shown some improvement in more recent years. On average, resource-rich countries have made the most progress, rising from 10% in the mid-1990s to around 17% in 2008. Non-resource-rich countries made some progress, with average tax revenues increasing from 10% to 15% over the same period.<ref>IMF FAD (2011), Revenue Mobilization in Developing Countries</ref> Many low-income countries have a tax-to-GDP ratio of less than 15% which could be due to low tax potentials, such as a limited taxable economic activity, or low tax effort due to policy choice, non-compliance, or administrative constraints. Some low-income countries have relatively high tax-to-GDP ratios due to resource tax revenues (e.g. [[Angola]]) or relatively efficient tax administration (e.g. [[Kenya]], [[Brazil]]) whereas some middle-income countries have lower tax-to-GDP ratios (e.g. [[Malaysia]]) which reflect a more tax-friendly policy choice. While overall tax revenues have remained broadly constant, the global trend shows trade taxes have been declining as a proportion of total revenues(IMF, 2011), with the share of revenue shifting away from border trade taxes towards domestically levied [[sales taxes]] on goods and services. Low-income countries tend to have a higher dependence on trade taxes, and a smaller proportion of income and consumption taxes when compared to high-income countries.<ref>IMF WP/05/112, Tax Revenue and (or?) Trade Liberalization, Thomas Baunsgaard and Michael Keen</ref> One indicator of the taxpaying experience was captured in the "Doing Business" survey,<ref>"Doing Business 2013", World Bank/IFC (2013)</ref> which compares the total tax rate, time spent complying with tax procedures, and the number of payments required through the year, across 176 countries. The "easiest" countries in which to pay taxes are located in the Middle East with the [[UAE]] ranking first, followed by [[Qatar]] and [[Saudi Arabia]], most likely reflecting low tax regimes in those countries. Countries in [[Sub-Saharan Africa]] are among the "hardest" to pay with the [[Central African Republic]], [[Republic of Congo]], [[Guinea]] and [[Chad]] in the bottom 5, reflecting higher total tax rates and a greater administrative burden to comply. ===Key facts=== The below facts were compiled by EPS PEAKS researchers:<ref name="Economics Topic Guide Taxation and Revenue" /> * [[Trade liberalization]] has led to a decline in trade taxes as a share of total revenues and GDP.<ref name="Economics Topic Guide Taxation and Revenue" /><ref name="Revenue Mobilisation in Sub Saharan Africa Challenges from Globalisation I Trade Reform">{{cite journal |last1=Keen |last2=Mansour |year=2010 |title=Revenue Mobilisation in Sub-Saharan Africa: Challenges from Globalisation I – Trade Reform |journal=Development Policy Review |volume=28 |issue=5 |pages=553–71 |doi=10.1111/j.1467-7679.2010.00498.x|s2cid=153915109 }}</ref> * Resource-rich countries tend to collect more revenue as a share of GDP, but this is more volatile. Sub-Saharan African countries that are resource-rich have performed better tax collecting than non-resource-rich countries, but revenues are more volatile from year to year.<ref name="Revenue Mobilisation in Sub Saharan Africa Challenges from Globalisation I Trade Reform" /> By strengthening revenue management, there are huge opportunities for investment for development and growth.<ref name="Economics Topic Guide Taxation and Revenue" /><ref>See for example Paul Collier (2010), The Political Economy of Natural Resources, social research Vol 77: No 4: Winter 2010.</ref> * Developing countries have an informal sector representing an average of around 40%, perhaps up to 60% in some.<ref>Schneider, Buehn, and Montenegro (2010), Shadow Economies all over the World: New Estimates for 162 Countries from 1999 to 2007.</ref> Informal sectors feature many small informal traders who may not be efficient in bringing into the tax net since the cost of collection is high and revenue potential limited (although there are broader governance benefits). There is also an issue of non-compliant companies who are "hard to tax", evading taxes and should be brought into the tax net.<ref name="Economics Topic Guide Taxation and Revenue" /><ref name="IMF 2011">IMF, 2011, Revenue Mobilization in Developing Countries, Fiscal Affairs Department</ref> * In many low-income countries, the majority of revenue is collected from a narrow tax base, sometimes because of a limited range of taxable economic activities. There is therefore dependence on few taxpayers, often multinationals, that can exacerbate the revenue challenge by minimizing their tax liability, in some cases abusing a lack of capacity in revenue authorities, sometimes through [[Transfer pricing|transfer pricing abuse]].{{elucidate|date=November 2013}}<ref name="Economics Topic Guide Taxation and Revenue" /><ref name="IMF 2011" /> * Developing and developed countries face huge challenges in taxing multinationals and international citizens. Estimates of tax revenue losses from evasion and avoidance in developing countries are limited by a lack of data and methodological shortcomings, but some estimates are significant.<ref name="Economics Topic Guide Taxation and Revenue" /><ref>See Section 3 'International Taxation' e.g. Torvik, 2009 in Commission on Capital Flight from Developing Countries, 2009: Tax Havens and Development</ref> * Countries use incentives to attract investment but doing this may be unnecessarily giving up revenue as evidence suggests that investors are influenced more by economic fundamentals like market size, infrastructure, and skills, and only marginally by tax incentives (IFC investor surveys).<ref name="Economics Topic Guide Taxation and Revenue" /> For example, even though the [[Government of Armenia]] supports the IT sector and seeks to improve the investment climate, the small size of the domestic market, low wages, low demand for productivity enhancement tools, financial constraints, high software piracy rates, and other factors make growth in this sector a slow process. Meaning that tax incentives do not contribute to the development of the sector as much as it is thought to contribute.<ref>[https://www.export.gov/article?id=Armenia-information-technology], Armenia – Information Technology</ref> Support towards the IT industry and tax incentives were established in the 2000s in [[Armenia]], and this example showcases that such policies are not the guarantee of rapid economic growth.<ref>[https://futurearmenian.com/wp-content/uploads/2021/08/Armenian-ICT-Sector-State-Of-The-Industry-Report.pdf], Armenian ICT Sector State Of The Industry Report</ref> * In low-income countries, compliance costs are high, they are lengthy processes, frequent tax payments, bribes and corruption.<ref name="Economics Topic Guide Taxation and Revenue" /><ref name="IMF 2011" /><ref>'Doing Business 2013', World Bank/IFC 2013</ref> * Administrations are often under-resourced, resources are not effectively targeted on areas of greatest impact, and mid-level management is weak. Coordination between domestic and customs is weak, which is especially important for VAT. Weak administration, governance, and corruption tend to be associated with low revenue collections (IMF, 2011).<ref name="Economics Topic Guide Taxation and Revenue" /> * Evidence on the effect of aid on tax revenues is inconclusive. Tax revenue is more stable and sustainable than aid. While a disincentive effect of aid on revenue may be expected and was supported by some early studies, recent evidence does not support that conclusion, and in some cases, points towards higher tax revenue following support for revenue mobilization.<ref name="Economics Topic Guide Taxation and Revenue" /> * Of all regions, Africa has the highest total tax rates borne by the business at 57.4% of the profit on average but has reduced the most since 2004, from 70%, partly due to introducing VAT and this is likely to have a beneficial effect on attracting investment.<ref name="Economics Topic Guide Taxation and Revenue" /><ref>Paying Taxes 2013: Total tax rate is a composite measure including corporate income tax, employment taxes, social contributions, indirect taxes, property taxes, and smaller taxes e.g. environmental tax.</ref> * Fragile states are less able to expand tax revenue as a percentage of GDP and any gains are more difficult to sustain.<ref>IMF Working Paper 108/12 (2012), Mobilizing Revenue in Sub-Saharan Africa: Empirical Norms and Key Determinants</ref> Tax administration tends to collapse if conflict reduces state-controlled territory or reduces productivity.<ref>African Economic Outlook (2010)</ref> As economies are rebuilt after conflicts, there can be good progress in developing effective tax systems. [[Liberia]] expanded from 10.6% of GDP in 2003 to 21.3% in 2011. [[Mozambique]] increased from 10.5% of GDP in 1994 to around 17.7% in 2011.<ref name="Economics Topic Guide Taxation and Revenue" /><ref>IMF Revenue Data, 2011: Total Tax Revenue as a percentage of GDP</ref> === Summary === Aid interventions in revenue can support revenue mobilization for growth, improve tax system design and administrative effectiveness, and strengthen governance and compliance.<ref name="Economics Topic Guide Taxation and Revenue" /> The author of the Economics Topic Guide found that the best aid modalities for revenue depend on country circumstances, but should aim to align with government interests and facilitate effective planning and implementation of activities under evidence-based tax reform. Lastly, she found that identifying areas for further reform requires country-specific diagnostic assessment: broad areas for developing countries identified internationally (e.g. IMF) include, for example, property taxation for local revenues, strengthening expenditure management, and effective taxation of extractive industries and multinationals.<ref name="Economics Topic Guide Taxation and Revenue" /> ==Views== ===Support=== {{Main|Social contract}} {{quote box | quote = Every tax, however, is, to the person who pays it, a badge, not of slavery, but of [[liberty]]. – [[Adam Smith]] (1776), ''[[Wealth of Nations]]''<ref name="Smith">{{Cite web|last=Smith |first=Adam |year=1776 |url=http://www2.hn.psu.edu/faculty/jmanis/adam-smith/Wealth-Nations.pdf |title=An Inquiry into the Nature and Causes of The Wealth of Nations |archive-url=https://web.archive.org/web/20131020042323/http://www2.hn.psu.edu/faculty/jmanis/adam-smith/Wealth-Nations.pdf |archive-date=20 October 2013 |url-status=dead |website=Penn State Electronic Classics Series |publication-date=2005 |page=704}}</ref> | width = 25% | align = right}} According to most [[Political philosophy|political philosophies]]<!-- whose? -->, taxes are justified as they fund activities that are necessary and beneficial to [[society]]. Additionally, [[progressive tax]]ation can be used to reduce [[economic inequality]] in a society. According to this view, taxation in modern nation-states benefit the majority of the population and [[Social change|social development]].<ref>[https://web.archive.org/web/20040701064132/http://www.unescap.org/esid/psis/publications/theme2002/chap5.asp Population and Social Integration Section (PSIS)], United Nations Social and Economic Commission for Asia and the Pacific</ref> A common presentation of this view, paraphrasing various statements by [[Oliver Wendell Holmes Jr.]] is "Taxes are the price of civilization".<ref>{{cite book|author=Eugene C. Gerhart|title=Quote it Completely!: World Reference Guide to More Than 5,500 Memorable Quotations from Law and Literature|url=https://books.google.com/books?id=kjwVASsTUm0C&pg=PA1045|year=1998|publisher=W.S. Hein|isbn=978-1-57588-400-4|page=1045}}</ref> It can also be argued that in a [[democracy]], because the government is the party performing the act of imposing taxes, society as a whole decides how the tax system should be organized.<ref>{{cite journal |last1=Logue |first1=Danielle |year=2009 |title=Moving policy forward: 'brain drain' as a wicked problem |journal=Globalisation, Societies & Education |volume=7 |issue=1 |pages=41–50 |doi=10.1080/14767720802677366|s2cid=145794119 }}</ref> The [[American Revolution]]'s "[[No taxation without representation]]" slogan implied this view. For traditional [[conservatives]], the payment of taxation is justified as part of the general obligations of citizens to obey the law and support established institutions. The conservative position is encapsulated in perhaps the most famous [[adage]] of [[public finance]], "An old tax is a good tax".<ref name="urlTax History Project: The Depression and Reform: FDRs Search for Tax Revision in N.Y. (Copyright, 2003, Tax Analysts)">{{Cite web|url=http://www.taxhistory.org/thp/readings.nsf/ArtWeb/44DC64199FBB0ED885256DFE005981FE?OpenDocument|title=Tax History Project – The Depression and Reform – FDR's Search for Tax Revision in N.Y.|website=www.taxhistory.org}}</ref> Conservatives advocate the "fundamental conservative premise that no one should be excused from paying for government, lest they come to believe that government is costless to them with the certain consequence that they will demand more government 'services'."<ref>{{cite web |url=http://www.heritage.org/Research/Taxes/HL349.cfm |title=Do Conservatives Have a Conservative Tax Agenda? |publisher=Heritage.org |access-date=22 January 2013 |url-status=dead |archive-url=https://web.archive.org/web/20090522061204/http://www.heritage.org/Research/Taxes/HL349.cfm |archive-date=22 May 2009 }}</ref> [[Social democrats]] generally favor higher levels of taxation to fund public provision of a wide range of services such as universal [[health care]] and education, as well as the provision of a range of [[Welfare state|welfare benefits]].<ref>Ruiz del Portal, X. 2009. "A general principal–agent setting with non-differentiable mechanisms: Some examples." Mathematical Social Sciences 57, no. 2: 262–78. Academic Search Premier, EBSCOhost.</ref> As argued by [[Anthony Crosland]] and others, the capacity to tax income from capital is a central element of the social democratic case for a [[mixed economy]] as against [[Marxist]] arguments for comprehensive public ownership of capital.<ref>{{cite book|last=Chaturvedi|first=Skand|title=Financial Management: Entailing Planning for the Future|url=https://books.google.com/books?id=AcykUkuRD2IC&pg=PA77|year=2009|publisher=Global India Publications|isbn=978-93-80228-56-3|page=77}}</ref> American [[Libertarianism in the United States|libertarians]] recommend a minimal level of taxation in order to maximize the protection of [[liberty]].{{Citation needed|date=March 2011}} Compulsory taxation of individuals, such as [[income tax]], is often justified on grounds including territorial [[sovereignty]], and the [[social contract]]. Defenders of business taxation argue that it is an efficient method of taxing income that ultimately flows to individuals, or that separate taxation of [[business]] is justified on the grounds that commercial activity necessarily involves the use of publicly established and maintained economic infrastructure, and that businesses are in effect charged for this use.<ref>Van Der Graaf, Rieke, and Johannes J. M. Van Delden. 2009. ''Clarifying appeals to dignity in medical ethics from a historical perspective.'' Bioethics 23, no. 3: 151–60. Academic Search Premier, EBSCOhost.</ref> [[Georgist]] economists argue that all of the [[economic rent]] collected from natural resources (land, mineral extraction, fishing quotas, etc.) is unearned income, and belongs to the community rather than any individual. They advocate a high tax (the "Single Tax") on land and other natural resources to return this unearned income to the state, but no other taxes. ===Against=== {{Main|Tax noncompliance|Taxation as slavery|Taxation as theft}} Because payment of tax is compulsory and enforced by the legal system, rather than voluntary like [[crowdfunding]], some political philosophies view taxation as theft, extortion, slavery, as a violation of [[property rights]], or tyranny, accusing the government of levying taxes via [[force (law)|force]] and [[coercive]] means.<ref>For an overview of the classical liberal perspective on taxation see [http://www.irefeurope.org/en/content/tax-and-justice www.irefeurope.org] {{Webarchive|url=https://web.archive.org/web/20091205185557/http://www.irefeurope.org/en/content/tax-and-justice |date=5 December 2009 }}</ref> [[Objectivists]], [[anarcho-capitalists]], and [[right-wing libertarian]]s see taxation as government aggression through the lens of the [[non-aggression principle]]. The view that democracy legitimizes taxation is rejected by those who argue that all forms of government, including laws chosen by democratic means, are fundamentally oppressive. According to [[Ludwig von Mises]], "society as a whole" should not make such decisions, due to [[methodological individualism]].<ref>''[[Human Action]]'' [https://www.mises.org/humanaction/chap2sec4.asp Chapter II. Sec. 4. The Principle of Methodological Individualism] by Ludwig von Mises</ref> Libertarian opponents of taxation claim that governmental protection, such as police and defense forces might be replaced by [[Market (economics)|market]] alternatives such as [[Private defense agency|private defense agencies]], [[arbitration]] agencies or [[Voluntary taxation|voluntary contributions]].<ref>{{cite web |url=https://www.mises.org/story/2701 |title=The Rule of Law Without the State |author=Spencer Heath MacCallum |publisher=[[Ludwig Von Mises Institute]] |date=12 September 2007 |access-date=16 August 2008}}</ref> [[Murray Rothbard]] argued in ''[[The Ethics of Liberty]]'' in 1982 that taxation is theft and that [[tax resistance]] is therefore legitimate: "Just as no one is morally required to answer a robber truthfully when he asks if there are any valuables in one's house, so no one can be morally required to answer truthfully similar questions asked by the state, e.g., when filling out income tax returns."<ref>{{cite book |url=http://mises.org/rothbard/ethics/twentyfour.asp |title="The Moral Status of Relations to the State", chapter 24 of ''The Ethics of Liberty'' |isbn= 978-0-8147-7506-6 |publisher=[[Humanities Press]] 1982, [[New York University Press]] 1998 |author=Murray N. Rothbard |access-date=2 September 2012 |date=May 1998 }}</ref><ref>{{cite web |url=http://mises.org/rothbard/ethics/twentyfour.asp |title="The State versus Liberty", excerpt from chapters 22–25 of ''The Ethics of Liberty'' (LewRockwell.com, 2007) |author=Murray N. Rothbard |access-date=2 September 2012 }}</ref> Many view government spending as an inefficient use of capital, and that the same projects that the government seeks to develop can be developed by private companies at much lower costs. This line of argument holds that government workers are not as personally invested in the efficiency of the projects, so the overspending happens at every step of the way. In the same regard, many public officials are not elected for their project management skills, so the projects can be mishandled. In the United States, President [[George W. Bush]] proposed in his 2009 budget "to terminate or reduce 151 discretionary programs" which were inefficient or ineffective.<ref>{{Cite web|date=February 2008|title=Major Savings and Reforms in the President's 2009 Budget|url=https://www.govinfo.gov/content/pkg/BUDGET-2009-SAVINGS/pdf/BUDGET-2009-SAVINGS.pdf|access-date=21 November 2021|website=govinfo}}</ref> Additionally, critics of taxation note that the process of taxation, not only unjustly takes money of citizens, it also unjustly takes considerable time away from citizens. For example, it is estimated by the American Action Forum that Americans spend 6.5 billion hours annually preparing their taxes.<ref>{{cite web |url=https://www.americanactionforum.org/insight/tracker-the-cost-of-tax-paperwork/|title=Tracker: The Cost of Tax Paperwork| date=14 April 2022}}</ref><ref>{{cite web |url=https://reason.com/2022/04/15/americans-will-spend-6-5-billion-hours-on-income-taxes-this-year/|title=Americans Will Spend 6.5 Billion Hours on Income Taxes This Year| date=15 April 2022}}</ref> This is equivalent of roughly 741,501 years of life lost every year to complete tax forms and other related paperwork. ===Socialism=== [[Karl Marx]] assumed that taxation would be unnecessary after the advent of communism and looked forward to the "[[withering away of the state]]". In socialist economies such as that of China, taxation played a minor role, since most government income was derived from the ownership of enterprises, and it was argued by some that monetary taxation was not necessary.<ref name="isbn0-275-93688-0">{{cite book |author=Li, Jinyan |title=Taxation in the People's Republic of China |publisher=Praeger |location=New York |year=1991 |isbn=978-0-275-93688-4 |url-access=registration |url=https://archive.org/details/taxatio_lij_1991_00_5240 }}</ref> While the morality of taxation is sometimes questioned, most arguments about taxation revolve around the degree and method of taxation and associated [[government spending]], not taxation itself. ===Choice=== {{undue weight|section|date=November 2012}} {{Main|Tax choice}} Tax choice is the theory that taxpayers should have more control with how their individual taxes are allocated. If taxpayers could choose which government organizations received their taxes, [[opportunity cost]] decisions would integrate their [[dispersed knowledge|partial knowledge]].<ref>{{cite journal |title=Tax morale and conditional cooperation |url=http://www.bsfrey.ch/articles/453_07.pdf |doi=10.1016/j.jce.2006.10.006 |access-date=3 January 2013 |volume=35 |journal=Journal of Comparative Economics |pages=136–59 |year=2007 |last1=Frey |first1=Bruno S. |last2=Torgler |first2=Benno |url-status=dead |archive-url=https://web.archive.org/web/20130120090643/http://www.bsfrey.ch/articles/453_07.pdf |archive-date=20 January 2013 }}</ref> For example, a taxpayer who allocated more of his taxes on [[public education]] would have less to allocate on [[public healthcare]]. Supporters argue that allowing taxpayers to [[demonstrated preference|demonstrate their preferences]] would help ensure that the [[government success|government succeeds]] at efficiently producing the [[public goods]] that taxpayers truly value.<ref>{{cite web |title=Do Earmarks Increase Giving to Government? |url=http://cbees.utdallas.edu/papers/gtg2.pdf |publisher=Cbees.utdallas.edu |access-date=3 January 2013 |url-status=dead |archive-url=https://web.archive.org/web/20130303125214/http://cbees.utdallas.edu/papers/gtg2.pdf |archive-date=3 March 2013 }}</ref> This would end [[real estate speculation]], [[business cycle]]s, [[unemployment]] and distribute wealth much more evenly. [[Joseph Stiglitz]]'s [[Henry George Theorem]] predicts its sufficiency because—as George also noted—public spending raises land value. ===Geoism=== {{Main|Georgism|Geolibertarianism|Land value tax}} [[Geoists]] (Georgists and [[geolibertarians]]) state that taxation should primarily collect [[economic rent]], in particular the [[land value taxation|value of land]], for both reasons of economic efficiency as well as morality. The efficiency of using [[economic rent]] for taxation is (as economists agree<ref>[[Adam Smith]], [[The Wealth of Nations]] [[s:The Wealth of Nations/Book V/Chapter 2|Book V, Chapter 2]], Part 2, Article I: Taxes upon the Rent of Houses</ref><ref>{{Cite book |last1=McCluskey |first1=William J. |last2=Franzsen |first2=Riël C. D. |title=Land Value Taxation: An Applied Analysis |page=4 |publisher=Ashgate Publishing, Ltd. |year=2005 |url=https://books.google.com/books?id=jkogP2U4k0AC&pg=PA73|isbn=978-0-7546-1490-6}}</ref><ref>{{cite web |url=http://www.cooperativeindividualism.org/friedman-milton_interview-1978.html |title=Milton Friedman Interviewed -- 1978 |access-date=29 March 2015 |url-status=dead |archive-url=https://web.archive.org/web/20150329223758/http://www.cooperativeindividualism.org/friedman-milton_interview-1978.html |archive-date=29 March 2015 }}</ref>) due to the fact that such taxation cannot be passed on and does not create any [[dead-weight loss]], and that it removes the incentive to speculate on land.<ref name="McCluskey and Franzsen">{{cite book |url=https://books.google.com/books?id=jkogP2U4k0AC&pg=PA73|title=Land Value Taxation: An Applied Analysis |author1=William J. McCluskey |author2=Riël C. D. Franzsen |publisher=Ashgate|isbn=978-0-7546-1490-6|page=73|year=2005 }}</ref> Its morality is based on the [[Geoist]] premise that [[private property]] is justified for products of labor but not for [[land (economics)|land]] and [[natural resources]].<ref name=pnp>{{cite book |last=George |first=Henry |title=Progress and Poverty: An Inquiry into the Cause of Industrial Depressions and of Increase of Want with Increase of Wealth |year=1879}}</ref> Economist and social reformer [[Henry George]] opposed [[sales taxes]] and [[protective tariffs]] for their negative impact on trade.<ref>{{cite book |last=George |first=Henry |title=Protection or Free Trade |url=https://archive.org/details/in.ernet.dli.2015.514177 |year=1886}}</ref> He also believed in the right of each person to the fruits of their own labor and productive investment. Therefore, income from [[Wage labour|paid labor]] and proper [[capital (economics)|capital]] should remain untaxed. For this reason many Geoists—in particular those that call themselves [[geolibertarian]]—share the view with [[libertarians]] that these types of taxation (but not all) are immoral and [[Taxation as theft|even theft]]. George stated there should be one [[single tax]]: the [[Land Value Tax]], which is considered both efficient and moral.<ref name=pnp /> Demand for specific land is dependent on nature, but even more so on the presence of communities, trade, and government infrastructure, particularly in [[urban area|urban]] environments. Therefore, the [[economic rent]] of land is not the product of one particular individual and it may be claimed for public expenses. According to George, this would end [[real estate bubble]]s, [[business cycles]], [[unemployment]] and distribute wealth much more evenly.<ref name=pnp /> [[Joseph Stiglitz]]'s [[Henry George Theorem]] predicts its sufficiency for financing public goods because those raise land value.<ref>{{cite journal |last=Arnott |first=Richard J. |author2=Joseph E. Stiglitz |title=Aggregate Land Rents, Expenditure on Public Goods, and Optimal City Size |journal=Quarterly Journal of Economics |date=Nov 1979 |volume=93 |issue=4 |pages=471–500 |jstor=1884466 |doi=10.2307/1884466|s2cid=53374401 |url=http://academiccommons.columbia.edu/download/fedora_content/download/ac:160390/CONTENT/4624867.pdf }}</ref> [[John Locke]] stated that whenever labor is mixed with natural resources, such as is the case with improved land, private property is justified under the [[Lockean proviso|proviso]] that there must be enough other natural resources of the same quality available to others.<ref>{{cite book |last=Locke |first=John |title=Second Treatise of Government |chapter-url=https://archive.org/details/secondtreatiseof07370gut |chapter=5}}</ref> [[Geoists]] state that the Lockean proviso is violated wherever [[land value]] is greater than zero. Therefore, under the assumed principle of equal rights of all people to natural resources, the occupier of any such land must compensate the rest of society to the amount of that value. For this reason, [[geoists]] generally believe that such payment cannot be regarded as a true 'tax', but rather a compensation or [[fee]].<ref>{{cite web |url=http://www.landvaluetax.org/what-is-lvt/ |title=What is LVT? |work=landvaluetax.org |access-date=29 March 2015 |archive-date=26 March 2015 |archive-url=https://web.archive.org/web/20150326001550/http://www.landvaluetax.org/what-is-lvt/ |url-status=dead }}</ref> This means that while Geoists also regard [[taxation]] as an instrument of [[social justice]], contrary to [[social democrats]] and [[social liberals]] they do not regard it as an instrument of [[redistribution (economics)|redistribution]] but rather a 'predistribution' or simply a correct distribution of [[the commons]].<ref>{{cite journal |last=Kerr |first=Gavin |title='Predistribution', property-owning democracy and land value taxation' |date=10 March 2015 |journal=Politics, Philosophy and Economics}}</ref> Modern [[geoists]] note that [[land (economics)|land]] in the [[classical economic]] meaning of the word referred to all [[natural resources]], and thus also includes resources such as [[mineral deposits]], [[water bodies]] and the [[electromagnetic spectrum]], to which privileged access also generates [[economic rent]] that must be compensated. Under the same reasoning most of them also consider [[pigouvian taxes]] as compensation for environmental damage or privilege as acceptable and even necessary.<ref>{{cite web |last1=Davies |first1=Lindy |title=The Science of Political Economy: What George "Left Out" |url=http://www.politicaleconomy.org/leftout.htm |website=politicaleconomy.org |access-date=16 June 2014}}</ref><ref>{{cite web |last1=Batt |first1=H. William |title=The Compatibility of Georgist Economics and Ecological Economics |url=http://www.wealthandwant.com/docs/Batt_GEE.html |access-date=9 June 2014}}</ref> ==Theories== {{Main|Theory of taxation}} ===Laffer curve=== {{Main|Laffer curve}} In [[economics]], the Laffer curve is a theoretical representation of the relationship between government revenue raised by taxation and all possible rates of taxation. It is used to illustrate the concept of taxable income elasticity (that [[taxable income]] will change in response to changes in the rate of taxation). The curve is constructed by [[thought experiment]]. First, the amount of tax revenue raised at the extreme tax rates of 0% and 100% is considered. It is clear that a 0% tax rate raises no revenue, but the Laffer curve hypothesis is that a 100% tax rate will also generate no revenue because at such a rate there is no longer any incentive for a rational taxpayer to earn any income, thus the revenue raised will be 100% of nothing. If both a 0% rate and 100% rate of taxation generate no revenue, it follows from the [[extreme value theorem]] that there must exist at least one rate in between where tax revenue would be a maximum. The Laffer curve is typically represented as a graph that starts at 0% tax, zero revenue, rises to a maximum rate of revenue raised at an intermediate rate of taxation, and then falls again to zero revenue at a 100% tax rate. One potential result of the Laffer curve is that increasing tax rates beyond a certain point will become counterproductive for raising further tax revenue. A hypothetical Laffer curve for any given economy can only be estimated and such estimates are sometimes controversial. [[The New Palgrave Dictionary of Economics]] reports that estimates of revenue-maximizing tax rates have varied widely, with a mid-range of around 70%.<ref>{{cite book |title=Laffer curve |first=Don |last=Fullerton |series=The New Palgrave Dictionary of Economics, Second Edition |publisher=Palgrave Macmillan |year=2008 |quote=The mid-range for this elasticity is around 0.4, with a revenue peak around 70 percent. |url=http://www.dictionaryofeconomics.com/article?id=pde2008_L000015 |access-date=5 July 2011}}</ref> ===Optimal=== {{Main|Optimal tax}} Most governments take revenue that exceeds that which can be provided by non-distortionary taxes or through taxes that give a double dividend. Optimal taxation theory is the branch of economics that considers how taxes can be structured to give the least deadweight costs, or to give the best outcomes in terms of [[social welfare]]. The [[Ramsey problem]] deals with minimizing deadweight costs. Because deadweight costs are related to the [[elasticity (economics)|elasticity]] of supply and demand for a good, it follows that putting the highest tax rates on the goods for which there are most inelastic supply and demand will result in the least overall deadweight costs. Some economists sought to integrate optimal tax theory with the [[social welfare function]], which is the economic expression of the idea that equality is valuable to a greater or lesser extent. If individuals experience [[diminishing returns]] from income, then the optimum distribution of income for society involves a progressive income tax. [[James Mirrlees|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 many political economists.<ref>{{cite web |url=http://wordsofliberty.net |title=Libertarian & Conservative News |publisher=Words of Liberty |access-date=22 January 2013 |url-status=dead |archive-url=https://web.archive.org/web/20130122183637/http://wordsofliberty.net/ |archive-date=22 January 2013 }}</ref> ===Rates=== {{Unreferenced section|date=June 2023}} {{Main|Tax rate}} Taxes are most often levied as a percentage, called the ''tax rate''. An important distinction when talking about tax rates is to distinguish between the [[Tax rate#Marginal|marginal rate]] and the [[Tax rate#Effective|effective tax rate]]. The effective rate is the total tax paid divided by the total amount the tax is paid on, while the marginal rate is the rate paid on the next dollar of income earned. For example, if income is taxed on a formula of 5% from $0 up to $50,000, 10% from $50,000 to $100,000, and 15% over $100,000, a [[wikt:taxpayer|taxpayer]] with income of $175,000 would pay a total of $18,750 in taxes. :Tax calculation ::(0.05*50,000) + (0.10*50,000) + (0.15*75,000) = 18,750 :The "effective rate" would be 10.7%: ::18,750/175,000 = 0.107 : The "marginal rate" would be 15%. ==See also== {{div col|colwidth=22em}} * [[Advance tax ruling]] * [[Black market]] * [[DIRTI 5]] * [[Excess burden of taxation]] * [[Fiscal capacity]] * [[Fiscal incidence]] * [[Fiscal sociology]] * [[Government budget balance]] * [[International taxation]] * [[List of taxes]] * [[Price ceiling]] * [[Price floor]] * [[Revolutionary tax]] * [[Shadow economy]] * [[Tax competition]] * [[Tax exporting]] * [[Tax haven]] * [[Tax resistance]] * [[Tax revenue]] * [[Tax shelter]] * [[Taxpayer receipt]] {{div col end}} ===By country or region=== * [[List of countries by tax rates]] * [[List of countries by tax revenue as percentage of GDP]] * [[Revenue service]] * [[:Category:Taxation by country]] ==References== {{reflist|30em}} ==Further reading== {{Library resources box | by=no | onlinebooks=no | others=no | about=yes | label=Tax }} * [http://www.bbc.com/capital/story/20150216-my-taxes-go-where?ocid=global_bbccom_email_19022015_capital My taxes go where? How countries spend your money] (17 February 2015), ''[[The BBC]]'' * {{cite encyclopedia |last1=Minarik |first1=Joseph J. |editor=[[David R. Henderson]]|encyclopedia=[[Concise Encyclopedia of Economics]] |title=Taxation |url=http://www.econlib.org/library/Enc/Taxation.html |year=2008 |edition=2nd |publisher=[[Library of Economics and Liberty]] |isbn=978-0865976658 |oclc=237794267}} * Genschel, Philipp; Seelkopf, Laura, eds. (2022). ''[https://oxford.universitypressscholarship.com/view/10.1093/oso/9780192897572.001.0001/oso-9780192897572? Global Taxation: How Modern Taxes Conquered the World]''. Oxford University Press. * Seelkopf, L., Bubek, M., Eihmanis, E. ''et al.'' [[doi:10.1007/s11558-019-09359-9|The rise of modern taxation: A new comprehensive dataset of tax introductions worldwide]]. ''Rev Int Organ'' (2019). ==External links== {{Sister project links}} <!--Please do not add links to organizations providing tax services. Such links will be deleted. Thanks for understanding.--> * [http://tid.seelkopf.eu/ Tax introduction database – A dataset of the introduction of taxes in 220 countries, 1750–2018.] * [http://stats.oecd.org/Index.aspx?DataSetCode=REV OECD tax statistics] * [https://www.wider.unu.edu/project/government-revenue-dataset ICTD/UNU-WIDER, Government Revenue Dataset] compilation of tax data mainly from [[OECD]] and [[International Monetary Fund|IMF]] {{Property navbox}} {{Authority control}} [[Category:Tax| ]] [[Category:3rd-millennium BC establishments in Egypt]] [[Category:Egyptian inventions]] [[Category:30th-century BC establishments]] Summary: Please note that all contributions to Christianpedia may be edited, altered, or removed by other contributors. If you do not want your writing to be edited mercilessly, then do not submit it here. You are also promising us that you wrote this yourself, or copied it from a public domain or similar free resource (see Christianpedia:Copyrights for details). 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