What is Tax? [Definition of Tax]

What is Tax?

A payment compulsory collected from individuals of firms by a government (central, state or local) or by the functional equivalent of a government. In modern societies taxes are paid in money, but payment in the from of commodities has occurred in the past. Current tax legislation requires that the level of tax payment is defined by objective criteria, and so it not set arbitrarily by the tax collector. This has not always been the case in principle, tax can be levied any identifiable characteristic though most taxes are based on economic characteristics or transactions.

What is Tax?

A resent exception in the UK community charge that was levied from 1990 to 1993. This was fixed tax payable by all adults, so was essentially a tax on existence. Taxes are employed by government to raise revenue. As a consequence, the increase in the size of government relative to the economy over the past 100 years has caused the average level of taxation or rise. 

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