sales taxes
Taxes on Transactions
Vocabulary
| tax | levy | transaction |
| sale | good | goods and services |
| privilege | instead | manufacture |
| product | petrol | own/owner |
| other | direct | indirect |
| main | type | such |
| excise | tariff | general (2) |
| add | cost | subtract |
| price | charge (2) | customer |
| form | like (2) | corporation |
| single | double | apply/applied |
| triple | rate | different |
| many | shift | item |
| impose | value | increase |
| each | stage | distribution |
| specific | include | such |
| tobacco | beverage | license |
| franchise | severance | right (4) |
| activity | motor | participate |
| vehicle | get married | marry/married |
| hunt | fishing | pay/payment |
| carry (2) | certain | type |
| such as | operate | public |
| private | utility | facility |
| process | resource | nature/natural |
| such as | timber | natural resource |
| gas | import | petroleum |
| export | provide | protect |
| domestic | foreign | expensive |
| cheap | industry | competition |
| raise | thus | stamp (2) |
| duty (2) | large | transaction |
| use | transfer | property |
| share | shares | deposit |
Taxes on Transactions
Taxes on transactions are levied on sales of goods and services, and on privileges. There are three main types of such taxes — general sales taxes, excise taxes, and tariffs.
General Sales Taxes
General sales taxes apply a single rate to the sales of many different items. Australia, Canada, and the United States impose sales taxes.
The value-added tax is a general sales tax levied in France, the United Kingdom, and other European countries. It is applied to the increase in value of a product at each stage in its manufacture and distribution.
Excise Taxes
Excise taxes are levied on the sales of specific products and on privileges. They include taxes on the sales of such items as petrol, tobacco, and alcoholic beverages.
Other excise taxes are the license tax, the franchise tax, and the severance tax.
License Taxes
The license tax is levied on the right to participate in an activity, such as selling alcoholic beverages, using a motor vehicle, getting married, or going hunting or fishing.
Franchise Taxes
Franchise tax is a payment for the right to carry on a certain kind of business, such as operating a restaurant chain, bus service or a public utility. Severance tax is levied on the processing of natural resources, such as timber, natural gas, or petroleum.
Tariffs
Tariffs are taxes on imported goods. Countries can use tariffs to protect their own industries from foreign competition. Tariffs provide such protection by raising the price of imported goods, thus making these goods more expensive than domestic products.
Stamp Duties
Stamp duties are taxes levied in Australia, New Zealand, and the United Kingdom on some large transactions. They are mainly used on transfers of property, shares, and bank deposits.
Indirect and Shifted Tax
General sales taxes and taxes on petrol and other products are called indirect taxes because they tax a service or privilege instead of a person.
Manufacturers and business owners pay these taxes, but they add the cost to the prices they charge their customers. These taxes, like corporation taxes, are a form of shifted taxes.
Questions
1. What are taxes on transactions?
2. The three types of taxes on transactions are…..
3. Do general sales taxes vary or are the same for all products?
4. Can you explain the VAT (value-added tax)?
5. What are examples of excise taxes? Examples of excise taxes include….
6. Give examples of license taxes.
7. What are some examples of severance taxes?
8. What is the purpose of tariffs?
9. Define indirect and shifted taxes.
A. What do you think of all these taxes? Do you find them complicated?
B. Should transactions taxes be flat or should they vary?
C. Should certain taxes be eliminated? Should certain taxes be increased?
D. Sales taxes ought to be eliminated. Yes or no?
E. Alcohol, tobacco, and gasoline taxes need to be increased. Do you agree?
F. Tariffs need to be eliminated. What do you think?
