kinds of taxes

Kinds of taxes



levy kind (2) government
tax most many/much
include the most important
property income transaction
value such factory
equipment direct indirect
expect pay because
ancient rank important
chief source wage
salary income local
rent dividend interest (2)
earn nation world
main type individual
also personal corporate
deduct automatic apply/applied (2)
employer employee unemployed
describe tax office corporation
shift cost customer
raise estate trust (2)
general consider in general/generally
gain capital (2) capital gains
price profit separate
sale receive exchange
property share shares
asset loss make/made
sale add subtract
overall amount work out (2)
liable treat country (2)
ordinary charge other
include estate inheritance
gift heir give/gave/given
during away give away
donor lifetime recipient

Governments levy many kinds of taxes. The most important kinds include property taxes, income taxes, and taxes on transactions.

Property Taxes

Property taxes are levied on the value of such property as houses, shops, factories, farms, and business equipment. They are called direct taxes because they are levied directly on the people who are expected to pay them.

The property tax first became important in ancient times. Today, it ranks as the chief source of income for many local governments.

Income Taxes

Income taxes are levied on income from such sources as wages and salaries, dividends, interest, rent, and earnings of companies. Most nations in the world levy income taxes.

There are two main types of income taxes–individual income taxes and corporate income taxes.

Individual Income Taxes

Individual income taxes, also called personal income taxes, are applied to the income of individuals and families. Many people have income tax deducted automatically from their earnings by employers, who then pay it to the tax office.

Corporate Income Taxes

Corporate income taxes are levied on earnings of companies or corporations. The corporate income tax also may be described as a shifted tax. This is because companies shift the cost of the tax to their customers by raising prices.

Earnings of Estates and Trusts

Income taxes may also be levied on the earnings of estates and trusts. They generally are considered to be direct taxes.

Capital Gains Tax

Capital gains tax is a tax, separate from income tax, levied on profits received from the sale or exchange of property, shares, or other assets.

If losses are made on some sales, they can be subtracted from overall profits to work out the amount liable to capital gains tax.

Some countries treat capital gains as ordinary income, and charge income tax on them.

Other Taxes

Other taxes include estate taxes, inheritance taxes, and gift taxes.

An estate tax is applied to the value of property before it has been given to heirs. An inheritance tax is levied on the value of property after it has been given to heirs.

A gift tax is applied to the value of property that is given away during a donor’s lifetime. The donor pays the tax. Inheritance tax is levied in the United Kingdom and Ireland.

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1. What are the three most important kinds of taxes? The three most important kinds of taxes are….

2. What are some examples of property taxes? Examples of property taxes include….

3. Are property taxes a recent development?

4. All countries of the world levy income taxes. True or false? If false, which ones do not?

5. Do individual employees usually handle their income taxes? Why don’t they handle their income taxes?

6. What does shifted tax mean? Shifted tax means….

7. What are estates and trusts? How do they make money?

8. What are capital gains taxes? Do you always pay capital gains tax?

9. Describe estate taxes, inheritance taxes, and gift taxes.
A. Are there many different types of taxes in your country? What are some types of taxes in your country?

B. Do you think these taxes are fair? What do people think of these taxes?

C. Should the tax laws or system be changed?

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