Government Sources of Revenue TAXES

Two Purposes of Taxation Raise money for government services Restrict and control the market [Administrative law]

Revenue Taxes = money raising Sales Tax = tax on what people purchase Inheritance Tax = tax on what a family gets when a loved one dies Property Tax = tax on land or cars that people buy

Regulatory Taxes = control a product User’s tax = tax on a carton of cigarettes or gasoline Tariff – tax on imported products

Types of Taxes Progressive Tax = increase in % the higher your income goes – income tax Proportional Tax = the same % is paid by all income levels – flat income tax Regressive Tax = greater burden on those who make the least amount of money – sales tax

Direct v Indirect Direct taxes are levied on the people themselves [income tax, sales tax] Indirect taxes are levied on the goods – but people eventually pay the tax because the price of the item increases. [tariff, property]