Types of Taxes

1. Types of Taxes Economics I – Shawnee Mission West

2. Progressive Tax • A tax that imposes a higher percentage rate of taxation on persons with higher incomes

3. Regressive Tax • A tax that imposes a higher percentage rate of taxation on low incomes than on high incomes • Examples include the sales tax

4. Proportional Tax • Imposes the same percentage rate of taxation on everyone, regardless of income

5. Individual Income Tax • The tax on people’s earnings

6. Corporate Income Tax • The tax a corporation pays on its profits

7. Sales Tax • A tax levied (charged) on most consumer purchases • Some states do not have

8. Sin Tax • A relatively high tax designed to raise revenue and reduce consumption of a socially undesirable product such as liquor or tobacco

9. Value Added Tax • A tax placed on the value that manufacturers add at each stage of production

10. Excise Tax • A tax on the manufacture or sale of selected items, such as gasoline or liquor

11. Estate Tax • The tax the government levies on the transfer of property when a person dies

12. Property Tax • Is a levy on property that the owner is required to pay • Typically on homes and cars