Two main types of Taxation

Taxation is an unavoidable administrative cost or any kind of levied tax against a taxpayer in order to finance various government public projects and government spending. A person may be charged with tax evasion if he fails to pay or deliberately evade the tax. Evasion of tax is punishable by law. The penalty for tax evasion depends upon the seriousness of the case and the degree of carelessness displayed by the taxpayer. Serious tax offenses like criminal tax evasion, financial tax fraud, money laundering, tax evasion, etc, are punishable with imprisonment for a number of years or even life imprisonment.

Many types of taxes can be levied, such as sales tax, property tax, income tax, etc. The type of tax that a person is charged with depends largely on the classification of tax under which he falls. Government levies are collected from citizens through local municipalities such as cities, counties, etc., while corporate levies are collected by state and federal governments. Some taxes are imposed by Congress, although the taxing powers are commonly exercised by states.

Most types of taxation are progressive, that is, increases in the levy rate result in progressively greater payments. Inflation may also occur, although not immediately, as prices rise in line with general inflation. Progressive taxation results from direct taxation of the income or wealth of a nation. indirect taxation occurs when a nation delegate a portion of its taxes to itself.

The main source of taxation is direct taxation. This is generally the most familiar type of taxation, because it involves both income tax and capital gains tax. A tax is also called a “registry levy” or “asset tax.” These names refer to a particular type of indirect taxation.

Many modern governments levy taxes on businesses and individuals for several reasons, including revenue generation, protection of resources, and the prevention of crime. Some governments levy taxes in order to meet their obligations to other nations, especially in cases where they are required to contribute financially to help finance a country’s budget deficit. Sometimes these taxes are levied in an effort to encourage economic growth. In many instances, however, these taxes are used purely as a source of revenue.

There are two main types of indirect taxation: regressive and progressive. Regressive taxation means that the burden of taxation is distributed more unequally than taxes that are progressive. Governments can use a regressive tax system in which taxes are levied progressively over time. If no tax revenues are raised, the burden of taxation will fall primarily on lower income citizens.