11. What is taxation?

Taxation is the act or system of charging taxes or money, collected from taxes.

Taxation is the compulsory transfer, usually of money, from the private sector to the government, for public purposes. Taxation is one of the three main sources of government revenue. The government raises the funds it needs to finance its expenses and payments through taxation, charges and borrowings.

Taxation is the imposition of a mandatory levy (сбор) on the citizens and/or the businesses of a country by their government. In almost every country, the government derives a majority of its revenues for financing public services from taxation. Most individuals will feel the impact of quite a number of taxes during their lifetimes. In addition, taxes have become a powerful instrument for policy makers around the world to use in attaining economic and social goals. As a result, the system of taxation in the United States and elsewhere has an impact on almost every business and investment decision that is made.

12. What types of taxes do you know?

Tax is an amount of money that you must pay to the government according to your income, property, goods etc, that is used to pay for public services. The three types of taxes are the proportional tax, the progressive tax, and the regressive tax.

A proportional tax imposes the same percentage of taxation on everyone, regardless of income. If the percentage tax rate is constant, the average tax rate is constant, regardless of income. This means that if a person's income goes up, the percentage of total income paid in taxes doesn't change.

The second tax, the progressive tax, imposes a higher percentage rate of taxation on those with higher incomes. Progressive taxes use a marginal tax rate that increases as the amount of taxable income increases. Therefore, the percentage of income paid in taxes increases as income goes up.

The final tax is the regressive tax, which imposes a higher percentage rate of taxation on low incomes than on high incomes. For example, if the state sales tax were 5%, the person with the lower income would pay a greater percentage of their total income in sales tax.

Kinds of Taxes

The two basic kinds of taxes are excise taxes(акцизный сбор) and property taxes.

An excise tax is directly imposed by the law-making body of a government on merchandise, products, or certain types of transactions, including carrying on a profession or business, obtaining a license, or transferring property. It is a fixed and absolute charge that does not depend upon the taxpayer's financial status or the value that the taxed property has to the taxpayer.

An estate tax is a tax that is placed on, and paid by, the estate of a decedent prior to the distribution of the property among the heirs in exchange for the privilege of transferring the property. Individuals who inherit property may be required to pay an inheritance tax on the value of the particular property received. Gift taxes are incurred by an individual who gives another a valuable gift.

Another type of excise tax is a sales tax, which is placed on certain goods and services. Precisely what goods and services are taxed is determined by the individual state legislatures. In some instances, a sales tax placed upon expensive items that are considered luxuries is known as a luxury tax.

A corporate tax is an excise tax imposed upon the privilege of conducting business in the corporate capacity, which provides certain advantages to individuals, such as limited liability. It is measured by the income of the corporation involved.

Other common examples of excise taxes are those imposed upon the processing of meat, tobacco, cheese, and sugar.

A property tax takes the taxpayer's wealth into account, as represented by the taxpayer's income or the property he or she owns. Income tax, for example, is a property tax that is assessed and levied upon the taxpayer's income; property taxes are imposed mainly on real property.

Taxes are also classified as direct and indirect.

A direct tax is one that is assessed upon the property, business, or income of the individual who is to pay the tax.

Conversely indirect taxes are taxes that are levied upon commodities before they reach the consumer who ultimately pay the taxes as part of the market price of the commodity. A common example of an indirect tax is a value-added tax, which is paid on the value added to the product at each stage of production, distribution, and sales.