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Tax — a compulsory contribution to state revenue, levied by the government…
Tax — a compulsory contribution to state revenue, levied by the government on workers’ income and business profits, so that it can pay for public services.
Types
Direct tax - tax which is collected directly from the person or company who pays it, for example income tax.
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Indirect tax - tax which, is collected from businesses on the goods and services that people buy from them
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Principles
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Ability-to-pay principle
a theory that states that people who earn more money should pay more tax, so that there are higher rates of tax on higher incomes.
Types
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Regressive tax
is one that takes a higher percentage of a low income and a lower percentage of a high income (ex. sales tax).
Progressive tax
is one that takes а larger percentage of a higher income and а smaller percentage of a lower income(ex. income tax).
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