Essay on Tax

Topics: Tax, Indirect tax, Taxation Pages: 2 (333 words) Published: December 18, 2012

Tax is a fee charged by the government on a product, income activity. Unlike most transfers wich are voluntary, taxes are mandatory. It is mandatory because no one would have injective to contribute. The verb to "tax" appears in English usage as early as ca.1290. The word comes from the olde french "taxe" which is after the Latin "taxere". The noun "tax" appears in English sometime before 1327.

Taxes can be divided to:

- Direct
- Indirect

If tax is charged directly on personal or corporate income then it is called direct tax. Direct taxes affect individuals and companies to the amount of the tax that cannot be eliminated by transfering to another party. Why does it matter? Individuals and entities affected by direct taxes should stay informed about how much they should be prepared to pay and if these changes might affect buisness decisions.

If tax is charged directly on the price of a good or service then it is called indirect tax. Indirect taxes can also be defined as fees that are charged equally upon taxpayers, no matter their income. This is a primary reason why there is thought of taxes that are passed on, as the price of the tax is compensated for by increasing the overall price of the good or service. Some economists argue that indirect taxes lead to an inefficient marketplace and alter market prices that don't match their equilibrium price.

People are taxed for several reasons. To support wars, to build roads and hiighways, insurance, and to finance people on income assistance and disability. Here are just some of the things that taxpayers dollars go to. Iraq and Afghanistan military operations, military personel and arms purchases, food stamps, veterans benefits, housing subsidies, federal highways, border security and immigration enforcement, foreign aid. There are too many to list. The taxes that raise the most revenue in canada are social security, medicare and medicaid, intrest on the national debt...
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