Question

Write a short essay about state and local taxes. Your answer should include the different types of state and local taxes, their definitions and their classification into either activity based tax or transaction based tax. Please state your answer in a good form which will includes introduction, structure and conclusion. 5 paragraphs
1 page

Answer 1

Taxation is differentiated from other forms of payment, such as market exchanges, in that taxation does not require consent and is not directly tied to any services rendered. The government compels taxation through an implicit or explicit threat of force. Taxation is legally different than extortion or a protection racket because the imposing institution is a government, not private actors.

which are usually income-oriented, and property or local taxes, which must be paid regardless of income. ... On the other hand, taxpayers obligated for a state income tax have the income to afford the nondeductibility of that state tax.

Different Types of Taxation

As mentioned above, taxation applies to all different types of levies. These can include (but are not limited to):

• Income tax: Governments impose income taxes on financial income generated by all entities within their jurisdiction, including individuals and businesses.
• Corporate tax: This type of tax is imposed on the profit of a business.
• Capital gains: A tax on capital gains is imposed on any capital gains or profits made by people or businesses from the sale of certain assets including stocks, bonds, or real estate.
• Property tax: A property tax is asses by a local government and paid for by the owner of a property. This tax is calculated based on property and land values.
• Inheritance: A type of tax levied on individuals who inherit the estate of a deceased person.
• Sales tax: A consumption tax imposed by a government on the sale of goods and services. This can take the form of a value-added tax (VAT), a goods and services tax (GST), a state or provincial sales tax, or an excise tax.