Nikiya Anton Bettey 2021: 05-21-2023-0046 - Tax ; stamp duty, land tax, reserve tax ; etc. ; inflation, annual, lump sum ; etc. ; federal government etc. ; (account, law, etc.) (verify collect verify distribute verify, administration, service, agency, etc.); usa tax payment to UK ; etc. ; usa tax payment to foreign countries, etc. ; tradition payment ; civilian and citizen payment to civil sector state and federal government ; accounts ; etc. ; (draft)

Monday, May 22, 2023

05-21-2023-0046 - Tax ; stamp duty, land tax, reserve tax ; etc. ; inflation, annual, lump sum ; etc. ; federal government etc. ; (account, law, etc.) (verify collect verify distribute verify, administration, service, agency, etc.); usa tax payment to UK ; etc. ; usa tax payment to foreign countries, etc. ; tradition payment ; civilian and citizen payment to civil sector state and federal government ; accounts ; etc. ; (draft)

From Wikipedia, the free encyclopedia

Part of a series on
Taxation

An aspect of fiscal policy

Total revenue from direct and indirect taxes given as share of GDP in 2017^[1]

A tax is a compulsory financial charge or some other type of levy imposed on a taxpayer (an individual or legal entity) by a governmental organization in order to fund government spending and various public expenditures (regional, local, or national),^[2] and tax compliance refers to policy actions and individual behaviour aimed at ensuring that taxpayers are paying the right amount of tax at the right time and securing the correct tax allowances and tax reliefs.^[3] The first known taxation took place in Ancient Egypt around 3000–2800 BC.^[4] Taxes consist of direct or indirect taxes and may be paid in money or as its labor equivalent.

Most countries have a tax system in place, in order to pay for public, common societal, or agreed national needs and for the functions of government. Some levy a flat percentage rate of taxation on personal annual income, but most scale taxes are progressive based on brackets of annual income amounts. Most countries charge a tax on an individual's income as well as on corporate income. Countries or subunits often also impose wealth taxes, inheritance taxes, estate taxes, gift taxes, property taxes, sales taxes, use taxes, payroll taxes, duties and/or tariffs.

In economic terms, taxation transfers wealth from households or businesses to the government. This has effects on economic growth and economic welfare that can be both increased (known as fiscal multiplier) or decreased (known as excess burden of taxation). Consequently, taxation is a highly debated topic by some, as although taxation is deemed necessary by general consensus in order for society to function and grow in an orderly and equitable manner through the government provision of public goods and public services,^[5]^[6]^[7]^[8] others such as libertarians and anarcho-capitalists are anti-taxation and denounce taxation broadly or in its entirety, classifying taxation as theft or extortion through coercion along with the use of force.

https://en.wikipedia.org/wiki/Tax

Pieter Brueghel the Younger, The tax collector's office, 1640

https://en.wikipedia.org/wiki/Tax

A lump-sum tax is a special way of taxation, based on a fixed amount, rather than on the real circumstance of the taxed entity.^[1] In this, the entity cannot do anything to change their liability.^[2]

In contrast with a per unit tax, lump-sum tax does not increase in size as the output increases.^[3]

^{https://en.wikipedia.org/wiki/Lump-sum_tax}

^{https://en.wikipedia.org/wiki/Tax_exemption}

^{https://en.wikipedia.org/wiki/Negative_income_tax}

^{https://en.wikipedia.org/wiki/Fungibility}

Illustration of a non-fungible token generated by a smart contract (a program designed to automatically execute contract terms)

A non-fungible token (NFT) is a unique digital identifier that is recorded on a blockchain, and is used to certify ownership and authenticity. It cannot be copied, substituted, or subdivided.^[1] The ownership of an NFT is recorded in the blockchain and can be transferred by the owner, allowing NFTs to be sold and traded. NFTs can be created by anybody, and require few or no coding skills to create.^[2] NFTs typically contain references to digital files such as artworks, photos, videos, and audio. Because NFTs are uniquely identifiable, they differ from cryptocurrencies, which are fungible.

Proponents claim that NFTs provide a public certificate of authenticity or proof of ownership, but the legal rights conveyed by an NFT can be uncertain. The ownership of an NFT as defined by the blockchain has no inherent legal meaning and does not necessarily grant copyright, intellectual property rights, or other legal rights over its associated digital file. An NFT does not restrict the sharing or copying of its associated digital file and does not prevent the creation of NFTs that reference identical files.

The trading of NFTs in 2021 increased to $17 billion over just $82 million in the previous year.^[3] NFTs have been used as speculative investments and they have drawn criticism for the energy cost and carbon footprint associated with some types of blockchain, as well as their use in art scams.^[4] The NFT market has also been compared to an economic bubble or a Ponzi scheme.^[5] During their peak, the three biggest NFT platforms were Ethereum, Solana and Cardano.^[6] In 2022, the NFT market collapsed; a May 2022 estimate was that the number of sales was down over 90% compared to 2021.^[7]

https://en.wikipedia.org/wiki/Non-fungible_token

https://en.wikipedia.org/wiki/Hypothecated_tax

https://en.wikipedia.org/wiki/Compliance_cost

Financial markets

Public market Exchange · Securities
Bond market
Bond valuation Corporate bond Fixed income Government bond High-yield debt Municipal bond Securitization
Stock market
Common stock Preferred stock Registered share Stock Stock certificate Stock exchange
Other markets
Derivatives (Credit derivative Futures exchange Hybrid security) Foreign exchange (Currency Exchange rate) Commodity Money Real estate Reinsurance
Over-the-counter (off-exchange)
Forwards Options Spot market Swaps
Trading
Participants Regulation Clearing
Related areas
Banks and banking Finance corporate personal public
v t e

A security is a tradable financial asset. The term commonly refers to any form of financial instrument, but its legal definition varies by jurisdiction. In some countries and languages people commonly use the term "security" to refer to any form of financial instrument, even though the underlying legal and regulatory regime may not have such a broad definition. In some jurisdictions the term specifically excludes financial instruments other than equities and fixed income instruments. In some jurisdictions it includes some instruments that are close to equities and fixed income, e.g., equity warrants.

Securities may be represented by a certificate or, more typically, they may be "non-certificated", that is in electronic (dematerialized) or "book entry only" form. Certificates may be bearer, meaning they entitle the holder to rights under the security merely by holding the security, or registered, meaning they entitle the holder to rights only if they appear on a security register maintained by the issuer or an intermediary. They include shares of corporate stock or mutual funds, bonds issued by corporations or governmental agencies, stock options or other options, limited partnership units, and various other formal investment instruments that are negotiable and fungible.

https://en.wikipedia.org/wiki/Security_(finance)

https://en.wikipedia.org/wiki/Financial_Conduct_Authority

https://en.wikipedia.org/wiki/Prudential_Regulation_Authority_(United_Kingdom)

https://en.wikipedia.org/wiki/Financial_Services_Authority_(United_Kingdom)

In many states with political systems derived from the Westminster system, a consolidated fund or consolidated revenue fund is the main bank account of the government. General taxation is taxation paid into the consolidated fund (as opposed to hypothecated taxes earmarked for specific purposes), and general spending is paid out of the consolidated fund.

https://en.wikipedia.org/wiki/Consolidated_Fund

Recurrent property taxes may be imposed on immovable property (real property) and on some classes of movable property. In addition, recurrent taxes may be imposed on the net wealth of individuals or corporations.^[18] Many jurisdictions impose estate tax, gift tax or other inheritance taxes on property at death or at the time of gift transfer. Some jurisdictions impose taxes on financial or capital transactions.

https://en.wikipedia.org/wiki/Tax

Stamp duty is a tax that is levied on single property purchases or documents (including, historically, the majority of legal documents such as cheques, receipts, military commissions, marriage licences and land transactions). A physical revenue stamp had to be attached to or impressed upon the document to show that stamp duty had been paid before the document was legally effective. More modern versions of the tax no longer require an actual stamp.

The duty is thought to have originated in Venice in 1604, being introduced (or re-invented) in Spain in the 1610s, the Spanish Netherlands in the 1620s,^[1] France in 1651,^[1] Denmark in 1657,^{[citation needed]} Prussia in 1682^{[citation needed]} and England in 1694.^[1]

https://en.wikipedia.org/wiki/Stamp_duty

Window tax was a property tax based on the number of windows in a house. It was a significant social, cultural, and architectural force in England, France, and Ireland during the 18th and 19th centuries. To avoid the tax, some houses from the period can be seen to have bricked-up window-spaces (ready to be glazed or reglazed at a later date). In England and Wales it was introduced in 1696 and was repealed 155 years later, in 1851. In France it was established in 1798 and was repealed in 1926. Scotland had window tax from 1748 until 1851.^[1]

https://en.wikipedia.org/wiki/Window_tax

In the United Kingdom a listed building^[a] is a structure of particular architectural and/or historic interest deserving of special protection.^[1] Such buildings are placed on one of the four statutory lists maintained by Historic England in England, Historic Environment Scotland in Scotland, Cadw in Wales, and the Northern Ireland Environment Agency in Northern Ireland. The term has also been used in the Republic of Ireland, where buildings are protected under the Planning and Development Act 2000, although the statutory term in Ireland is "protected structure".^[2]

^{https://en.wikipedia.org/wiki/Listed_building}

International tax law distinguishes between an estate tax and an inheritance tax. An inheritance tax is a tax paid by a person who inherits money or property of a person who has died, whereas an estate tax is a levy on the estate (money and property) of a person who has died.^[1] However, this distinction is not always observed; for example, the UK's "inheritance tax" is a tax on the assets of the deceased, and strictly speaking is therefore an estate tax.

For historical reasons, the term death duty is still used colloquially (though not legally) in the UK and some Commonwealth countries. For political, statutory and other reasons, the term death tax is sometimes used to refer to estate tax in the United States.^{[citation needed]}

https://en.wikipedia.org/wiki/Inheritance_tax

Real estate is property consisting of land and the buildings on it, along with its natural resources such as crops, minerals or water; immovable property of this nature; an interest vested in this (also) an item of real property, (more generally) buildings or housing in general.^[1]^[2] In terms of law, real is in relation to land property and is different from personal property while estate means the "interest" a person has in that land property.^[3]

https://en.wikipedia.org/wiki/Real_estate

https://en.wikipedia.org/wiki/Farm

A land value tax (LVT) is a levy on the value of land without regard to buildings, personal property and other improvements.^[1] It is also known as a location value tax, a point valuation tax, a site valuation tax, split rate tax, or a site-value rating.

https://en.wikipedia.org/wiki/Land_value_tax

A property tax (whose rate is expressed as a percentage or per mille, also called millage)^[1] is an ad valorem tax on the value of a property.^{[Note 1]}

The tax is levied by the governing authority of the jurisdiction in which the property is located. This can be a national government, a federated state, a county or geographical region or a municipality. Multiple jurisdictions may tax the same property.

Often a property tax is levied on real estate. It may be imposed annually or at the time of a real estate transaction, such as in real estate transfer tax. This tax can be contrasted to a rent tax, which is based on rental income or imputed rent, and a land value tax, which is a levy on the value of land, excluding the value of buildings and other improvements.

Under a property-tax system, the government requires or performs an appraisal of the monetary value of each property, and tax is assessed in proportion to that value.

Type

The four broad types of property taxes are land, improvements to land (immovable man-made objects, such as buildings), personal property (movable man-made objects) and intangible property.^{[citation needed]} Real property (also called real estate or realty) is the combination of land and improvements.

https://en.wikipedia.org/wiki/Property_tax

An ad valorem tax (Latin for "according to value") is a tax whose amount is based on the value of a transaction or of a property. It is typically imposed at the time of a transaction, as in the case of a sales tax or value-added tax (VAT). An ad valorem tax may also be imposed annually, as in the case of a real or personal property tax, or in connection with another significant event (e.g. inheritance tax, expatriation tax, or tariff).^[1] In some countries, a stamp duty is imposed as an ad valorem tax.

https://en.wikipedia.org/wiki/Ad_valorem_tax

Part of a series on
Taxation

An aspect of fiscal policy

A financial transaction tax (FTT) is a levy on a specific type of financial transaction for a particular purpose. The tax has been most commonly associated with the financial sector for transactions involving intangible property rather than real property. It is not usually considered to include consumption taxes paid by consumers.^[1]

A transaction tax is levied on specific transactions designated as taxable rather than on any other attributes of financial institutions. If an institution is never a party to a taxable transaction, then no transaction tax will be levied from it.^[2] If an institution carries out one such transaction, then it will be levied the tax for the one transaction. This tax narrower in scope than a financial activities tax (FAT), and is not directly an industry or sector tax like a Financial stability contribution (FSC), or "bank tax",^[3] for example. These distinctions are important in discussions about the utility of financial transaction tax as a tool to selectively discourage excessive speculation without discouraging any other activity (as John Maynard Keynes originally envisioned it in 1936).^[4]

There are several types of financial transaction taxes. Each has its own purpose. Some have been implemented, while some are only proposals. Concepts are found in various organizations and regions around the world. Some are domestic and meant to be used within one nation; whereas some are multinational.^[5] In 2011 there were 40 countries that made use of FTT, together raising $38 billion (€29bn).^[6]^[7]

https://en.wikipedia.org/wiki/Financial_transaction_tax

When real estate is held by a higher government unit or some other entity not subject to taxation by the local government, the taxing authority may receive a payment in lieu of taxes to compensate it for some or all of the foregone tax revenues.

https://en.wikipedia.org/wiki/Tax

Transfer

Historically, in many countries, a contract needs to have a stamp affixed to make it valid. The charge for the stamp is either a fixed amount or a percentage of the value of the transaction. In most countries, the stamp has been abolished but stamp duty remains. Stamp duty is levied in the UK on the purchase of shares and securities, the issue of bearer instruments, and certain partnership transactions. Its modern derivatives, stamp duty reserve tax and stamp duty land tax, are respectively charged on transactions involving securities and land. Stamp duty has the effect of discouraging speculative purchases of assets by decreasing liquidity. In the United States, transfer tax is often charged by the state or local government and (in the case of real property transfers) can be tied to the recording of the deed or other transfer documents.

https://en.wikipedia.org/wiki/Tax

Wealth (net worth)

Some countries' governments will require a declaration of the taxpayers' balance sheet (assets and liabilities), and from that exact a tax on net worth (assets minus liabilities), as a percentage of the net worth, or a percentage of the net worth exceeding a certain level. The tax may be levied on "natural" or "legal persons."

https://en.wikipedia.org/wiki/Tax

Sales

Sales taxes are levied when a commodity is sold to its final consumer. Retail organizations contend that such taxes discourage retail sales. The question of whether they are generally progressive or regressive is a subject of much current debate. People with higher incomes spend a lower proportion of them, so a flat-rate sales tax will tend to be regressive. It is therefore common to exempt food, utilities, and other necessities from sales taxes, since poor people spend a higher proportion of their incomes on these commodities, so such exemptions make the tax more progressive. This is the classic "You pay for what you spend" tax, as only those who spend money on non-exempt (i.e. luxury) items pay the tax.

A small number of U.S. states rely entirely on sales taxes for state revenue, as those states do not levy a state income tax. Such states tend to have a moderate to a large amount of tourism or inter-state travel that occurs within their borders, allowing the state to benefit from taxes from people the state would otherwise not tax. In this way, the state is able to reduce the tax burden on its citizens. The U.S. states that do not levy a state income tax are Alaska, Tennessee, Florida, Nevada, South Dakota, Texas,^[22] Washington state, and Wyoming. Additionally, New Hampshire and Tennessee levy state income taxes only on dividends and interest income. Of the above states, only Alaska and New Hampshire do not levy a state sales tax. Additional information can be obtained at the Federation of Tax Administrators website.

In the United States, there is a growing movement^[23] for the replacement of all federal payroll and income taxes (both corporate and personal) with a national retail sales tax and monthly tax rebate to households of citizens and legal resident aliens. The tax proposal is named FairTax. In Canada, the federal sales tax is called the Goods and Services Tax (GST) and now stands at 5%. The provinces of British Columbia, Saskatchewan, Manitoba, and Prince Edward Island also have a provincial sales tax [PST]. The provinces of Nova Scotia, New Brunswick, Newfoundland & Labrador, and Ontario have harmonized their provincial sales taxes with the GST—Harmonized Sales Tax [HST], and thus is a full VAT. The province of Quebec collects the Quebec Sales Tax [QST] which is based on the GST with certain differences. Most businesses can claim back the GST, HST, and QST they pay, and so effectively it is the final consumer who pays the tax.

https://en.wikipedia.org/wiki/Tax

Excises

An excise duty is an indirect tax imposed upon goods during the process of their manufacture, production or distribution, and is usually proportionate to their quantity or value. Excise duties were first introduced into England in the year 1643, as part of a scheme of revenue and taxation devised by parliamentarian John Pym and approved by the Long Parliament. These duties consisted of charges on beer, ale, cider, cherry wine, and tobacco, to which list were afterward added paper, soap, candles, malt, hops, and sweets. The basic principle of excise duties was that they were taxes on the production, manufacture, or distribution of articles which could not be taxed through the customs house, and revenue derived from that source is called excise revenue proper. The fundamental conception of the term is that of a tax on articles produced or manufactured in a country. In the taxation of such articles of luxury as spirits, beer, tobacco, and cigars, it has been the practice to place a certain duty on the importation of these articles (a customs duty).^[24]

Excises (or exemptions from them) are also used to modify consumption patterns of a certain area (social engineering). For example, a high excise is used to discourage alcohol consumption, relative to other goods. This may be combined with hypothecation if the proceeds are then used to pay for the costs of treating illness caused by alcohol use disorder. Similar taxes may exist on tobacco, pornography, etc., and they may be collectively referred to as "sin taxes". A carbon tax is a tax on the consumption of carbon-based non-renewable fuels, such as petrol, diesel-fuel, jet fuels, and natural gas. The object is to reduce the release of carbon into the atmosphere. In the United Kingdom, vehicle excise duty is an annual tax on vehicle ownership.

https://en.wikipedia.org/wiki/Tax

Tariff

An import or export tariff (also called customs duty or impost) is a charge for the movement of goods through a political border. Tariffs discourage trade, and they may be used by governments to protect domestic industries. A proportion of tariff revenues is often hypothecated to pay the government to maintain a navy or border police. The classic ways of cheating a tariff are smuggling or declaring a false value of goods. Tax, tariff and trade rules in modern times are usually set together because of their common impact on industrial policy, investment policy, and agricultural policy. A trade bloc is a group of allied countries agreeing to minimize or eliminate tariffs against trade with each other, and possibly to impose protective tariffs on imports from outside the bloc. A customs union has a common external tariff, and the participating countries share the revenues from tariffs on goods entering the customs union.

In some societies, tariffs also could be imposed by local authorities on the movement of goods between regions (or via specific internal gateways). A notable example is the likin, which became an important revenue source for local governments in the late Qing China.

Other

License fees

Occupational taxes or license fees may be imposed on businesses or individuals engaged in certain businesses. Many jurisdictions impose a tax on vehicles.

https://en.wikipedia.org/wiki/Tax

Other

Some types of taxes have been proposed but not actually adopted in any major jurisdiction. These include:

Bank tax
Financial transaction taxes including currency transaction taxes

https://en.wikipedia.org/wiki/Tax

Descriptive labels

Ad valorem and per unit

An ad valorem tax is one where the tax base is the value of a good, service, or property. Sales taxes, tariffs, property taxes, inheritance taxes, and value-added taxes are different types of ad valorem tax. An ad valorem tax is typically imposed at the time of a transaction (sales tax or value-added tax (VAT)) but it may be imposed on an annual basis (property tax) or in connection with another significant event (inheritance tax or tariffs).

In contrast to ad valorem taxation is a per unit tax, where the tax base is the quantity of something, regardless of its price. An excise tax is an example.

Direct and indirect

Taxes are sometimes referred to as "direct taxes" or "indirect taxes". The meaning of these terms can vary in different contexts, which can sometimes lead to confusion. An economic definition, by Atkinson, states that "...direct taxes may be adjusted to the individual characteristics of the taxpayer, whereas indirect taxes are levied on transactions irrespective of the circumstances of buyer or seller."^[29] According to this definition, for example, income tax is "direct", and sales tax is "indirect".

In law, the terms may have different meanings. In U.S. constitutional law, for instance, direct taxes refer to poll taxes and property taxes, which are based on simple existence or ownership. Indirect taxes are imposed on events, rights, privileges, and activities.^[30] Thus, a tax on the sale of the property would be considered an indirect tax, whereas the tax on simply owning the property itself would be a direct tax.

https://en.wikipedia.org/wiki/Tax

In between is a proportional tax, where the effective tax rate is fixed, while the amount to which the rate is applied increases.

https://en.wikipedia.org/wiki/Tax

A progressive tax is a tax imposed so that the effective tax rate increases as the amount to which the rate is applied increases.

https://en.wikipedia.org/wiki/Tax

Fees and effective

Governments may charge user fees, tolls, or other types of assessments in exchange of particular goods, services, or use of property. These are generally not considered taxes, as long as they are levied as payment for a direct benefit to the individual paying.^[31] Such fees include:

Tolls: a fee charged to travel via a road, bridge, tunnel, canal, waterway or other transportation facilities. Historically tolls have been used to pay for public bridge, road, and tunnel projects. They have also been used in privately constructed transport links. The toll is likely to be a fixed charge, possibly graduated for vehicle type, or for distance on long routes.
User fees, such as those charged for use of parks or other government-owned facilities.
Ruling fees charged by governmental agencies to make determinations in particular situations.

Some scholars refer to certain economic effects as taxes, though they are not levies imposed by governments. These include:

Inflation tax: the economic disadvantage suffered by holders of cash and cash equivalents in one denomination of currency due to the effects of expansionary monetary policy^[32]
Financial repression: Government policies such as interest-rate caps on government debt, financial regulations such as reserve requirements and capital controls, and barriers to entry in markets where the government owns or controls businesses.^[33]

https://en.wikipedia.org/wiki/Tax

History

Egyptian peasants seized for non-payment of taxes. (Pyramid Age)

The first known system of taxation was in Ancient Egypt around 3000–2800 BC, in the First Dynasty of the Old Kingdom of Egypt.^[4] The earliest and most widespread forms of taxation were the corvée and the tithe. The corvée was forced labor provided to the state by peasants too poor to pay other forms of taxation (labor in ancient Egyptian is a synonym for taxes).^[34] Records from the time document that the Pharaoh would conduct a biennial tour of the kingdom, collecting tithes from the people. Other records are granary receipts on limestone flakes and papyrus.^[35] Early taxation is also described in the Bible. In Genesis (chapter 47, verse 24 – the New International Version), it states "But when the crop comes in, give a fifth of it to Pharaoh. The other four-fifths you may keep as seed for the fields and as food for yourselves and your households and your children". Samgharitr is the name mentioned for the Tax collector in the Vedic texts.^[36] In Hattusa, the capital of the Hittite Empire, grains were collected as a tax from the surrounding lands, and stored in silos as a display of the king's wealth.^[37]

In the Persian Empire, a regulated and sustainable tax system was introduced by Darius I the Great in 500 BC;^[38] the Persian system of taxation was tailored to each Satrapy (the area ruled by a Satrap or provincial governor). At differing times, there were between 20 and 30 Satrapies in the Empire and each was assessed according to its supposed productivity. It was the responsibility of the Satrap to collect the due amount and to send it to the treasury, after deducting his expenses (the expenses and the power of deciding precisely how and from whom to raise the money in the province, offer maximum opportunity for rich pickings). The quantities demanded from the various provinces gave a vivid picture of their economic potential. For instance, Babylon was assessed for the highest amount and for a startling mixture of commodities; 1,000 silver talents and four months supply of food for the army. India, a province fabled for its gold, was to supply gold dust equal in value to the very large amount of 4,680 silver talents. Egypt was known for the wealth of its crops; it was to be the granary of the Persian Empire (and, later, of the Roman Empire) and was required to provide 120,000 measures of grain in addition to 700 talents of silver.^[39] This tax was exclusively levied on Satrapies based on their lands, productive capacity and tribute levels.^[40]

The Rosetta Stone, a tax concession issued by Ptolemy V in 196 BC and written in three languages "led to the most famous decipherment in history—the cracking of hieroglyphics".^[41]

In the Roman Republic, taxes were collected from individuals at the rate of between 1% and 3% of the assessed value of their total property. However, since it was extremely difficult to facilitate the collection of the tax, the government auctioned it every year. The winning tax farmers (called publicani) paid the tax revenue to the government in advance and then kept the taxes collected from individuals. The publicani paid the tax revenue in coins, but collected the taxes using other exchange media, thus relieving the government of the work to carry out the currency conversion themselves. The revenue payment essentially worked as a loan to the government, which paid interest on it. Although this scheme was a profitable enterprise for the government as well as the publicani, it was later replaced by a direct tax system by the emperor Augustus; after which, each province was obliged to pay 1% tax on wealth and a flat rate on each adult. This brought about regular census and shifted the tax system more towards taxing an individual's income rather than wealth.^[42]

Islamic rulers imposed Zakat (a tax on Muslims) and Jizya (a poll tax on conquered non-Muslims). In India this practice began in the 11th century.

Trends

Numerous records of government tax collection in Europe since at least the 17th century are still available today. But taxation levels are hard to compare to the size and flow of the economy since production numbers are not as readily available. Government expenditures and revenue in France during the 17th century went from about 24.30 million livres in 1600–10 to about 126.86 million livres in 1650–59 to about 117.99 million livres in 1700–10 when government debt had reached 1.6 billion livres. In 1780–89, it reached 421.50 million livres.^[43] Taxation as a percentage of production of final goods may have reached 15–20% during the 17th century in places such as France, the Netherlands, and Scandinavia. During the war-filled years of the eighteenth and early nineteenth century, tax rates in Europe increased dramatically as war became more expensive and governments became more centralized and adept at gathering taxes. This increase was greatest in England, Peter Mathias and Patrick O'Brien found that the tax burden increased by 85% over this period. Another study confirmed this number, finding that per capita tax revenues had grown almost sixfold over the eighteenth century, but that steady economic growth had made the real burden on each individual only double over this period before the industrial revolution. Effective tax rates were higher in Britain than France in the years before the French Revolution, twice in per capita income comparison, but they were mostly placed on international trade. In France, taxes were lower but the burden was mainly on landowners, individuals, and internal trade and thus created far more resentment.^[44]

Taxation as a percentage of GDP 2016 was 45.9% in Denmark, 45.3% in France, 33.2% in the United Kingdom, 26% in the United States, and among all OECD members an average of 34.3%.^[45]^[46]

Forms

In monetary economies prior to fiat banking, a critical form of taxation was seigniorage, the tax on the creation of money.

Other obsolete forms of taxation include:

Scutage, which is paid in lieu of military service; strictly speaking, it is a commutation of a non-tax obligation rather than a tax as such but functioning as a tax in practice.
Tallage, a tax on feudal dependents.
Tithe, a tax-like payment (one-tenth of one's earnings or agricultural produce), paid to the Church (and thus too specific to be a tax in strict technical terms). This should not be confused with the modern practice of the same name which is normally voluntary.
(Feudal) aids, a type of tax or due that was paid by a vassal to his lord during feudal times.
Danegeld, a medieval land tax originally raised to pay off raiding Danes and later used to fund military expenditures.
Carucage, a tax which replaced the Danegeld in England.
Tax farming, the principle of assigning the responsibility for tax revenue collection to private citizens or groups.
Socage, a feudal tax system based on land rent.
Burgage, a feudal tax system based on land rent.

Some principalities taxed windows, doors, or cabinets to reduce consumption of imported glass and hardware. Armoires, hutches, and wardrobes were employed to evade taxes on doors and cabinets. In some circumstances, taxes are also used to enforce public policy like congestion charge (to cut road traffic and encourage public transport) in London. In Tsarist Russia, taxes were clamped on beards. Today, one of the most-complicated taxation systems worldwide is in Germany. Three-quarters of the world's taxation literature refers to the German system.^{[citation needed]} Under the German system, there are 118 laws, 185 forms, and 96,000 regulations, spending €3.7 billion to collect the income tax.^{[citation needed]} In the United States, the IRS has about 1,177 forms and instructions,^[47] 28.4111 megabytes of Internal Revenue Code^[48] which contained 3.8 million words as of 1 February 2010,^[49] numerous tax regulations in the Code of Federal Regulations,^[50] and supplementary material in the Internal Revenue Bulletin.^[51] Today, governments in more advanced economies (i.e. Europe and North America) tend to rely more on direct taxes, while developing economies (i.e. several African countries) rely more on indirect taxes.

Economic effects

Public finance revenue from taxes in % of GDP. For this data, 32% of the variance of GDP per capita – adjusted for purchasing power parity (PPP) – is explained by revenue from social security and the like.

In economic terms, taxation transfers wealth from households or businesses to the government of a nation. Adam Smith writes in The Wealth of Nations that

"…the economic incomes of private people are of three main types: rent, profit, and wages. Ordinary taxpayers will ultimately pay their taxes from at least one of these revenue sources. The government may intend that a particular tax should fall exclusively on rent, profit, or wages – and that another tax should fall on all three private income sources jointly. However, many taxes will inevitably fall on resources and persons very different from those intended … Good taxes meet four major criteria. They are (1) proportionate to incomes or abilities to pay (2) certain rather than arbitrary (3) payable at times and in ways convenient to the taxpayers and (4) cheap to administer and collect."^[52]

The side-effects of taxation (such as economic distortions) and theories about how best to tax are an important subject in microeconomics. Taxation is almost never a simple transfer of wealth. Economic theories of taxation approach the question of how to maximize economic welfare through taxation.

A 2019 study looking at the impact of tax cuts for different income groups, it was tax cuts for low-income groups that had the greatest positive impact on employment growth.^[53] Tax cuts for the wealthiest top 10% had a small impact.^[53]

https://en.wikipedia.org/wiki/Tax

Support

Every tax, however, is, to the person who pays it, a badge, not of slavery, but of liberty. – Adam Smith (1776), Wealth of Nations^[82]

According to most political philosophies, taxes are justified as they fund activities that are necessary and beneficial to society. Additionally, progressive taxation can be used to reduce economic inequality in a society. According to this view, taxation in modern nation-states benefit the majority of the population and social development.^[83] A common presentation of this view, paraphrasing various statements by Oliver Wendell Holmes Jr. is "Taxes are the price of civilization".^[84]

It can also be argued that in a democracy, because the government is the party performing the act of imposing taxes, society as a whole decides how the tax system should be organized.^[85] The American Revolution's "No taxation without representation" slogan implied this view. For traditional conservatives, the payment of taxation is justified as part of the general obligations of citizens to obey the law and support established institutions. The conservative position is encapsulated in perhaps the most famous adage of public finance, "An old tax is a good tax".^[86] Conservatives advocate the "fundamental conservative premise that no one should be excused from paying for government, lest they come to believe that government is costless to them with the certain consequence that they will demand more government 'services'."^[87] Social democrats generally favor higher levels of taxation to fund public provision of a wide range of services such as universal health care and education, as well as the provision of a range of welfare benefits.^[88] As argued by Anthony Crosland and others, the capacity to tax income from capital is a central element of the social democratic case for a mixed economy as against Marxist arguments for comprehensive public ownership of capital.^[89] American libertarians recommend a minimal level of taxation in order to maximize the protection of liberty.^{[citation needed]}

Compulsory taxation of individuals, such as income tax, is often justified on grounds including territorial sovereignty, and the social contract. Defenders of business taxation argue that it is an efficient method of taxing income that ultimately flows to individuals, or that separate taxation of business is justified on the grounds that commercial activity necessarily involves the use of publicly established and maintained economic infrastructure, and that businesses are in effect charged for this use.^[90] Georgist economists argue that all of the economic rent collected from natural resources (land, mineral extraction, fishing quotas, etc.) is unearned income, and belongs to the community rather than any individual. They advocate a high tax (the "Single Tax") on land and other natural resources to return this unearned income to the state, but no other taxes.

Against

Because payment of tax is compulsory and enforced by the legal system, rather than voluntary like crowdfunding, some political philosophies view taxation as theft, extortion, slavery, as a violation of property rights, or tyranny, accusing the government of levying taxes via force and coercive means.^[91] Objectivists, anarcho-capitalists, and right-wing libertarians see taxation as government aggression through the lens of the non-aggression principle. The view that democracy legitimizes taxation is rejected by those who argue that all forms of government, including laws chosen by democratic means, are fundamentally oppressive. According to Ludwig von Mises, "society as a whole" should not make such decisions, due to methodological individualism.^[92] Libertarian opponents of taxation claim that governmental protection, such as police and defense forces might be replaced by market alternatives such as private defense agencies, arbitration agencies or voluntary contributions.^[93]

Murray Rothbard argued in The Ethics of Liberty in 1982 that taxation is theft and that tax resistance is therefore legitimate: "Just as no one is morally required to answer a robber truthfully when he asks if there are any valuables in one's house, so no one can be morally required to answer truthfully similar questions asked by the state, e.g., when filling out income tax returns."^[94]^[95]

Many view government spending as an inefficient use of capital, and that the same projects that the government seeks to develop can be developed by private companies at much lower costs. This line of argument holds that government workers are not as personally invested in the efficiency of the projects, so the overspending happens at every step of the way. In the same regard, many public officials are not elected for their project management skills, so the projects can be mishandled. In the United States, President George W. Bush proposed in his 2009 budget "to terminate or reduce 151 discretionary programs" which were inefficient or ineffective.^[96]

Additionally, critics of taxation note that the process of taxation, not only unjustly takes money of citizens, it also unjustly takes considerable time away from citizens. For example, it is estimated by the American Action Forum that Americans spend 6.5 billion hours annually preparing their taxes.^[97]^[98] This is equivalent of roughly 741,501 years of life lost every year to complete tax forms and other related paperwork.

https://en.wikipedia.org/wiki/Tax

https://en.wikipedia.org/wiki/Tax
https://en.wikipedia.org/wiki/Dispersed_knowledge
https://en.wikipedia.org/wiki/Georgism
https://en.wikipedia.org/wiki/Taxable_income
https://en.wikipedia.org/wiki/Optimal_tax
https://en.wikipedia.org/wiki/Tax_rate
https://en.wikipedia.org/wiki/Tax_rate#Marginal
https://en.wikipedia.org/wiki/Fiscal_capacity
https://en.wikipedia.org/wiki/Black_market
https://en.wikipedia.org/wiki/Price_floor
https://en.wikipedia.org/wiki/List_of_taxes
https://en.wikipedia.org/wiki/International_taxation
https://en.wikipedia.org/wiki/Tax_haven
https://en.wikipedia.org/wiki/Taxpayer_receipt
https://en.wikipedia.org/wiki/Tax_revenue
https://en.wikipedia.org/wiki/Tax_shelter
https://en.wikipedia.org/wiki/Inflation
https://en.wikipedia.org/wiki/Public_good_(economics)
https://en.wikipedia.org/wiki/Law_enforcement
https://en.wikipedia.org/wiki/Tax_evasion
https://en.wikipedia.org/wiki/Cash_and_cash_equivalents
https://en.wikipedia.org/wiki/Direct_tax
https://en.wikipedia.org/wiki/Social_engineering_(political_science)
https://en.wikipedia.org/wiki/Payment_in_lieu_of_taxes
https://en.wikipedia.org/wiki/Federal_government_of_the_United_States

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Taxation

An aspect of fiscal policy

Total revenue from direct and indirect taxes given as share of GDP in 2017^[1]

Overview

Pieter Brueghel the Younger, The tax collector's office, 1640

The legal definition and the economic definition of taxes differ in some ways such that economists do not regard many transfers to governments as taxes. For example, some transfers to the public sector are comparable to prices. Examples include tuition at public universities and fees for utilities provided by local governments. Governments also obtain resources by "creating" money and coins (for example, by printing bills and by minting coins), through voluntary gifts (for example, contributions to public universities and museums), by imposing penalties (such as traffic fines), by borrowing and confiscating criminal proceeds. From the view of economists, a tax is a non-penal, yet compulsory transfer of resources from the private to the public sector, levied on a basis of predetermined criteria and without reference to specific benefits received.

In modern taxation systems, governments levy taxes in money; but in-kind and corvée taxation are characteristic of traditional or pre-capitalist states and their functional equivalents. The method of taxation and the government expenditure of taxes raised is often highly debated in politics and economics. Tax collection is performed by a government agency such as the Internal Revenue Service (IRS) in the United States, His Majesty's Revenue and Customs (HMRC) in the United Kingdom, the Canada Revenue Agency or the Australian Taxation Office. When taxes are not fully paid, the state may impose civil penalties (such as fines or forfeiture) or criminal penalties (such as incarceration) on the non-paying entity or individual.^[9]

Purposes and effects

The levying of taxes aims to raise revenue to fund governing or to alter prices in order to affect demand. States and their functional equivalents throughout history have used the money provided by taxation to carry out many functions. Some of these include expenditures on economic infrastructure (roads, public transportation, sanitation, legal systems, public security, public education, public health systems), military, scientific research & development, culture and the arts, public works, distribution, data collection and dissemination, public insurance, and the operation of government itself. A government's ability to raise taxes is called its fiscal capacity.

When expenditures exceed tax revenue, a government accumulates government debt. A portion of taxes may be used to service past debts. Governments also use taxes to fund welfare and public services. These services can include education systems, pensions for the elderly, unemployment benefits, transfer payments, subsidies and public transportation. Energy, water and waste management systems are also common public utilities.

According to the proponents of the chartalist theory of money creation, taxes are not needed for government revenue, as long as the government in question is able to issue fiat money. According to this view, the purpose of taxation is to maintain the stability of the currency, express public policy regarding the distribution of wealth, subsidizing certain industries or population groups or isolating the costs of certain benefits, such as highways or social security.^[10]

Effects of taxes can be divided into two fundamental categories:

Taxes cause an income effect because they reduce purchasing power to taxpayers.
Taxes cause a substitution effect when taxation causes a substitution between taxed goods and untaxed goods.

Substitution effect and income effect with a taxation on y good

If we consider, for instance, two normal goods, x and y, whose prices are respectively p_x and p_y and an individual budget constraint given by the equation xp_x + yp_y = Y, where Y is the income, the slope of the budget constraint, in a graph where is represented good x on the vertical axis and good y on the horizontal axes, is equal to -p_y/p_x . The initial equilibrium is in the point (C), in which budget constraint and indifference curve are tangent, introducing an ad valorem tax on the y good (budget constraint: p_xx + p_y(1 + τ)y = Y), the budget constraint's slope becomes equal to -p_y(1 + τ)/p_x. The new equilibrium is now in the tangent point (A) with a lower indifferent curve.

As can be noticed the tax's introduction causes two consequences:

It changes the consumers' real income (less purchasing power)
It raises the relative price of y good.

The income effect shows the variation of y good quantity given by the change of real income. The substitution effect shows the variation of y good determined by relative prices' variation. This kind of taxation (that causes the substitution effect) can be considered distortionary.

Budget's constraint shift after an introduction of a lump sum tax or a general tax on consumption or a proportional income tax

Another example can be the introduction of an income lump-sum tax (xp_x + yp_y = Y - T), with a parallel shift downward of the budget constraint, can be produced a higher revenue with the same loss of consumers' utility compared with the property tax case, from another point of view, the same revenue can be produced with a lower utility sacrifice. The lower utility (with the same revenue) or the lower revenue (with the same utility) given by a distortionary tax are called excess pressure. The same result, reached with an income lump-sum tax, can be obtained with these following types of taxes (all of them cause only a budget constraint's shift without causing a substitution effect), the budget constraint's slope remains the same (-p_x/p_y):

A general tax on consumption: (Budget constraint: p_x(1 + τ)x + p_y(1 + τ)y = Y)
A proportional income tax: (Budget constraint: xp_x + yp_y = Y(1 - t))

When the t and τ rates are chosen respecting this equation (where t is the rate of income tax and tau is the consumption tax's rate):

$\frac{1}{1 + τ} = 1 - t \Rightarrow t = \frac{τ}{1 + τ}$

the effects of the two taxes are the same.

A tax effectively changes the relative prices of products. Therefore, most economists, especially neoclassical economists, argue that taxation creates market distortion and results in economic inefficiency unless there are (positive or negative) externalities associated with the activities that are taxed that need to be internalized to reach an efficient market outcome. They have therefore sought to identify the kind of tax system that would minimize this distortion. Recent scholarship suggests that in the United States of America, the federal government effectively taxes investments in higher education more heavily than it subsidizes higher education, thereby contributing to a shortage of skilled workers and unusually high differences in pre-tax earnings between highly educated and less-educated workers.

Taxes can even have effects on labor supply: we can consider a model in which the consumer chooses the number of hours spent working and the amount spent on consumption. Let us suppose that only one good exists and no income is saved.

Consumers have a given number of hours (H) that is divided between work (L) and free time (F = H - L). The hourly wage is called w and it tells us the free time's opportunity cost, i.e. the income to which the individual renounces consuming an additional hour of free time. Consumption and hours of work have a positive relationship, more hours of work mean more earnings and, assuming that workers do not save money, more earnings imply an increase in consumption (Y = C = wL). Free time and consumption can be considered as two normal goods (workers have to decide between working one hour more, that would mean consuming more or having one more hour of free time) and the budget constraint is negatively inclined (Y = w(H - F)). The indifference curve related to these two goods has a negative slope and free time becomes more and more important with high levels of consumption. This is because a high level of consumption means that people are already spending many hours working, so, in this situation, they need more free time than consume and it implies that they have to be paid with a higher salary to work an additional hour. A proportional income tax, changing budget constraint's slope (now Y = w(1 - t)(H - F)), implies both substitution and income effects. The problem now is that the two effects go in opposite ways: the income effect tells us that, with an income tax, the consumer feels poorer and for this reason he wants to work more, causing an increase in labor offer. On the other hand, the substitution effect tells us that free time, being a normal good, is now more convenient compared to consume and it implies a decrease in labor offer. Therefore, the total effect can be both an increase or a decrease of labor offer, depending on the indifference curve's shape.

The Laffer curve. In this case, the critical point is at a tax rate of 70%. Revenue increases^[11] until this peak, then it starts decreasing.

The Laffer curve depicts the amount of government revenue as a function of the rate of taxation. It shows that for a tax rate above a certain critical rate, government revenue starts decreasing as the tax rate rises, as a consequence of a decline in labor supply. This theory supports that, if the tax rate is above that critical point, a decrease in the tax rate should imply a rise in labor supply that in turn would lead to an increase in government revenue.

Governments use different kinds of taxes and vary the tax rates. They do this in order to distribute the tax burden among individuals or classes of the population involved in taxable activities, such as the business sector, or to redistribute resources between individuals or classes in the population. Historically, taxes on the poor supported the nobility; modern social-security systems aim to support the poor, the disabled, or the retired by taxes on those who are still working. In addition, taxes are applied to fund foreign aid and military ventures, to influence the macroeconomic performance of the economy (a government's strategy for doing this is called its fiscal policy; see also tax exemption), or to modify patterns of consumption or employment within an economy, by making some classes of the transaction more or less attractive.

A state's tax system often reflects its communal values and the values of those in current political power. To create a system of taxation, a state must make choices regarding the distribution of the tax burden—who will pay taxes and how much they will pay—and how the taxes collected will be spent. In democratic nations where the public elects those in charge of establishing or administering the tax system, these choices reflect the type of community that the public wishes to create. In countries where the public does not have a significant amount of influence over the system of taxation, that system may reflect more closely the values of those in power.

All large businesses incur administrative costs in the process of delivering revenue collected from customers to the suppliers of the goods or services being purchased. Taxation is no different, as governments are large organizations; the resource collected from the public through taxation is always greater than the amount which can be used by the government.^{[citation needed]} The difference is called the compliance cost and includes (for example) the labor cost and other expenses incurred in complying with tax laws and rules. The collection of a tax in order to spend it on a specified purpose, for example collecting a tax on alcohol to pay directly for alcoholism-rehabilitation centers, is called hypothecation. Finance ministers often dislike this practice, since it reduces their freedom of action. Some economic theorists regard hypothecation as intellectually dishonest since, in reality, money is fungible. Furthermore, it often happens that taxes or excises initially levied to fund some specific government programs are then later diverted to the government general fund. In some cases, such taxes are collected in fundamentally inefficient ways, for example, through highway tolls.

Since governments also resolve commercial disputes, especially in countries with common law, similar arguments are sometimes used to justify a sales tax or value added tax. Some (libertarians, for example) portray most or all forms of taxes as immoral due to their involuntary (and therefore eventually coercive or violent) nature. The most extreme anti-tax view, anarcho-capitalism, holds that all social services should be voluntarily bought by the people using them.

Types

The Organisation for Economic Co-operation and Development (OECD) publishes an analysis of the tax systems of member countries. As part of such analysis, OECD has developed a definition and system of classification of internal taxes,^[12] generally followed below. In addition, many countries impose taxes (tariffs) on the import of goods.

Income

Income tax

Many jurisdictions tax the income of individuals and of business entities, including corporations. Generally, the authorities impose a tax on net profits from a business, on net gains, and on other income. Computation of income subject to tax may be determined under accounting principles used in the jurisdiction, which tax-law principles in the jurisdiction may modify or replace. The incidence of taxation varies by system, and some systems may be viewed as progressive or regressive. Rates of tax may vary or be constant (flat) by income level. Many systems allow individuals certain personal allowances and other non-business reductions to taxable income, although business deductions tend to be favored over personal deductions.

Tax-collection agencies often collect personal income tax on a pay-as-you-earn basis, with corrections made after the end of the tax year. These corrections take one of two forms:

payments to the government, from taxpayers who have not paid enough during the tax year
tax refunds from the government to those who have overpaid

Income-tax systems often make deductions available that reduce the total tax liability by reducing total taxable income. They may allow losses from one type of income to count against another - for example, a loss on the stock market may be deducted against taxes paid on wages. Other tax systems may isolate the loss, such that business losses can only be deducted against business income tax by carrying forward the loss to later tax years.

Negative income tax

In economics, a negative income tax (abbreviated NIT) is a progressive income tax system where people earning below a certain amount receive supplemental payment from the government instead of paying taxes to the government.

Capital gains

Most jurisdictions imposing an income tax treat capital gains as part of income subject to tax. Capital gain is generally a gain on sale of capital assets—that is, those assets not held for sale in the ordinary course of business. Capital assets include personal assets in many jurisdictions. Some jurisdictions provide preferential rates of tax or only partial taxation for capital gains. Some jurisdictions impose different rates or levels of capital-gains taxation based on the length of time the asset was held. Because tax rates are often much lower for capital gains than for ordinary income, there is widespread controversy and dispute about the proper definition of capital.

Corporate

Corporate tax refers to income tax, capital tax, net-worth tax, or other taxes imposed on corporations. Rates of tax and the taxable base for corporations may differ from those for individuals or for other taxable persons.

Social-security contributions

General government revenue, in % of GDP, from social contributions. For this data, 20% of the variance of GDP per capita – adjusted for purchasing power parity (PPP) – is explained by revenue from social security and the like.

Many countries provide publicly funded retirement or healthcare systems.^[13] In connection with these systems, the country typically requires employers and/or employees to make compulsory payments.^[14] These payments are often computed by reference to wages or earnings from self-employment. Tax rates are generally fixed, but a different rate may be imposed on employers than on employees.^[15] Some systems provide an upper limit on earnings subject to the tax. A few systems provide that the tax is payable only on wages above a particular amount. Such upper or lower limits may apply for retirement but not for health-care components of the tax. Some have argued that such taxes on wages are a form of "forced savings" and not really a tax, while others point to redistribution through such systems between generations (from newer cohorts to older cohorts) and across income levels (from higher income levels to lower income-levels) which suggests that such programs are really taxed and spending programs.

Payroll or workforce

Unemployment and similar taxes are often imposed on employers based on the total payroll. These taxes may be imposed in both the country and sub-country levels.^[16]

Wealth

A wealth tax is levied on the total value of personal assets, including: bank deposits, real estate, assets in insurance and pension plans, ownership of unincorporated businesses, financial securities, and personal trusts.^[17] Liabilities (primarily mortgages and other loans) are typically deducted, hence it is sometimes called a net wealth tax.

Property

Property taxes

A property tax (or millage tax) is an ad valorem tax levy on the value of a property that the owner of the property is required to pay to a government in which the property is situated. Multiple jurisdictions may tax the same property. There are three general varieties of property: land, improvements to land (immovable man-made things, e.g. buildings), and personal property (movable things). Real estate or realty is the combination of land and improvements to the land.

Property taxes are usually charged on a recurrent basis (e.g., yearly). A common type of property tax is an annual charge on the ownership of real estate, where the tax base is the estimated value of the property. For a period of over 150 years from 1695, the government of England levied a window tax, with the result that one can still see listed buildings with windows bricked up in order to save their owner's money. A similar tax on hearths existed in France and elsewhere, with similar results. The two most common types of event-driven property taxes are stamp duty, charged upon change of ownership, and inheritance tax, which many countries impose on the estates of the deceased.

In contrast with a tax on real estate (land and buildings), a land-value tax (or LVT) is levied only on the unimproved value of the land ("land" in this instance may mean either the economic term, i.e., all-natural resources, or the natural resources associated with specific areas of the Earth's surface: "lots" or "land parcels"). Proponents of the land-value tax argue that it is economically justified, as it will not deter production, distort market mechanisms or otherwise create deadweight losses the way other taxes do.^[19]

In many jurisdictions (including many American states), there is a general tax levied periodically on residents who own personal property (personalty) within the jurisdiction. Vehicle and boat registration fees are subsets of this kind of tax. The tax is often designed with blanket coverage and large exceptions for things like food and clothing. Household goods are often exempt when kept or used within the household.^[20] Any otherwise non-exempt object can lose its exemption if regularly kept outside the household.^[20] Thus, tax collectors often monitor newspaper articles for stories about wealthy people who have lent art to museums for public display, because the artworks have then become subject to personal property tax.^[20] If an artwork had to be sent to another state for some touch-ups, it may have become subject to personal property tax in that state as well.^[20]

Inheritance

Inheritance tax, estate tax, and death tax or duty are the names given to various taxes that arise on the death of an individual. In United States tax law, there is a distinction between an estate tax and an inheritance tax: the former taxes the personal representatives of the deceased, while the latter taxes the beneficiaries of the estate. However, this distinction does not apply in other jurisdictions; for example, if using this terminology UK inheritance tax would be an estate tax.

Expatriation

An expatriation tax is a tax on individuals who renounce their citizenship or residence. The tax is often imposed based on a deemed disposition of all the individual's property. One example is the United States under the American Jobs Creation Act, where any individual who has a net worth of $2 million or an average income-tax liability of $127,000 who renounces his or her citizenship and leaves the country is automatically assumed to have done so for tax avoidance reasons and is subject to a higher tax rate.^[21]