TGM
18:41
Warning
Info
Warning
Info
LSDefine
Simple English definitions for legal terms
taxation
Read a random definition: current liability
A quick definition of taxation:
Taxation: Taxation is when the government collects money from people and businesses to pay for things like schools, roads, and hospitals. Sometimes, the same thing or person can be taxed twice, which is called double taxation. However, there are rules to make sure that everyone is taxed fairly and equally. Some types of businesses, like partnerships and S corporations, are taxed differently than others, and the owners of those businesses have to pay taxes on the money the business makes instead of the business itself.
A more thorough explanation:
Definition: Taxation is the process of imposing or assessing a tax, which is a fee charged by the government to individuals or businesses to fund public services and activities.
Examples:
- Double taxation: This occurs when the same property or corporate profit is taxed twice by the government during the same period and for the same purpose. For example, if a person owns a rental property, they may have to pay property tax on it as well as income tax on the rental income they receive from it.
- Equal and uniform taxation: This is a tax system in which everyone in the same district is taxed at the same rate on the same value or thing. For instance, if a city imposes a sales tax of 5%, everyone who buys something in that city will pay the same 5% tax rate.
- Pass-through taxation: This is a tax system in which the owners of a business are taxed for the business's income without the business itself being taxed. For example, if a person owns a partnership or an S corporation, they will be taxed on their share of the business's income, but the business itself will not be taxed.
The examples illustrate how taxation works in different situations. Double taxation shows how the same property or income can be taxed twice, which can be a burden for taxpayers. Equal and uniform taxation ensures that everyone pays the same tax rate, which can be fairer than a system that taxes some people more than others. Pass-through taxation allows business owners to be taxed for their share of the business's income without the business itself being taxed, which can be beneficial for small businesses.