Little Known Facts About Something Everyone Dreads or Hates, TAXES
A tax (from the Latin taxo; “I estimate”) is a financial charge or other levy imposed upon a person by a state or governing body. According to Black’s Law Dictionary, a tax is a “pecuniary burden laid upon individuals or property owners to support the government. In one place I read that it is not a “voluntary donation, but a forced payment”.
With taxes being due on Monday, and some people (like me) still not done. I had to look at the lighter side.
Income tax, a tax on the income that you make. Negative Income tax, money the government pays you because you make so little money that you receive supplemental pay from the government instead of paying taxes to the government.
Capital Gains tax are taxes you pay for money you made on a sale of something in which you profited. Property Tax, yep, taxes on the property you own.
Expatriation Tax, this is a tax for people that leave the country and renounce their citizenship, 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. I did not know that.
Excise Tax, this is a fake tax to raise money for something attached to a product. A special form of hypothecation arises where an excise is used to compensate a party to a transaction for alleged uncontrollable abuse; for example, a blank media tax is a tax on recordable media such as CD-Rs, whose proceeds are typically allocated to copyright holders.
Tariff, a tax levied against a country to even up the price when you ship products overseas to America. Sometimes there are products that are way too cheap so the it levels the competition.
Environmental tax.-This includes natural resources consumption tax, greenhouse gas tax (Carbon tax), “sulfuric tax”, and others. Also known as the poluter tax. The stated purpose is to reduce the environmental impact by repricing.
The first known system of taxation was in Ancient Egypt around 3000 BC – 2800 BC in the first dynasty of the Old Kingdom. The earliest and most widespread form of taxation was the corvée and tithe. The corvée was forced labour provided to the state by peasants too poor to pay other forms of taxation (labour in ancient Egyptian is a synonym for taxes) Records from the time document that the pharaoh would conduct a biennial tour of the kingdom, collecting tithes from the people.
The Laffer curve is a theoretical representation of the relationship between government revenue raised by taxation and all possible rates of taxation. It is used to illustrate the concept of taxable income elasticity (that taxable income will change in response to changes in the rate of taxation). Ummmm anyone?
Taxes are most often levied as a percentage, called the tax rate. An important distinction when talking about tax rates is to distinguish between the marginal rate and the effective (average) rate. The effective rate is the total tax paid divided by the total amount the tax is paid on, while the marginal rate is the rate paid on the next dollar of income earned. For example, if income is taxed on a formula of 5% from $0 up to $50,000, 10% from $50,000 to $100,000, and 15% over $100,000, a taxpayer with income of $175,000 would pay a total of $18,750 in taxes.
- Tax calculation
- (0.05*50,000) + (0.10*50,000) + (0.15*75,000) = 18,750
- The “effective rate” would be 10.7%:
- 18,750/175,000 = 0.107
- The “marginal rate” would be 15%.
- Just something for fun during tax time. Now get back to work!!!
- Most information from Wikipedia “Tax”