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Definition of a Tax:

A tax is a payment mandated by the government to be paid by individuals, households, and businesses to finance government operations.

Detailed Explanation:

Taxes provide governments with the vast majority of the income needed to provide public services. There are many types of taxes. Personal and corporate income taxes are levied directly on a family or corporation. In most countries income taxes are progressive, meaning those families or corporations with a higher income have a higher tax rate. Sales taxes are collected by the seller when a good is sold. The amount is a percentage of the purchase price. This is a regressive tax because the sales tax comprises a larger percentage of their income than wealthier consumers. While wealthier consumers may spend more in a year, they also invest, so less of their income on a percentage basis is spent as a sales tax. The property tax is assessed based on the value of an asset owned by the taxpayer. Other common taxes include excise taxes, estate taxes, tariffs, value-added taxes, capital gains taxes, and payroll taxes such as Social Security and medicare. Economists study how a tax affects the economy. Does one tax discourage investment more than another? Does a tax burden lower-income families more than wealthy families? 

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