XIV.

TAXES Sales taxes

SCJ Oliver Wendell Holmes

 Taxes are what we pay for civilized society Kinds of Taxes

1. Regressive

Goals of Taxation 2. Proportional

1. raise money for govt services 3. Progressive

2. promote well-being of society

3. helps people afford service markets (public 1. Regressive

safety, national defense and education)  applied across the board
4. protect environment  hit lower incomes harder
5. help country implement fiscal and Sales taxes, tolls
monetary policies

6. way to redistribute wealth in a society 2. Proportional

7. to try to change people's behavior (sin tax
 require same amount of percentage for all
on cigarettes
taxpayers

Flat tax

 tax system with constant marginal rate

Govt subsidies and vouchers

 shift wealth
 shift total tax burden away from the
wealthy to lower
Luxury tax

 additional tax bill on expensive items not

considered essential 3. Progressive

Carbon tax  opposite if regressive

 tax based on greenhouse gas emissions  individuals pay more as they make more
generated from burning fuels money

1. Direct taxes IRS

 paid directly by person or org to govt  uses marginak income tax brackets (based
on taxable income)
Property taxes

Income taxes
Tax reductions, tax exemptions, tax
deductions
2. Indirect taxes
 reduce amount people owe
 collected by seller, paid by buyers
Progressiveness
 distort market prices➡ effiency
 offsets regressiveness
VAT
Tax Rebellion

-American Revolution

•Indian Salt March

-outlawed Indians selling salts

-British (8.2% salt tax)

•Mohandhas Gandhi

-defy Salt Act

-walking 240 miles to Arabian sea to gather free

salt