tax(redirected from tax system)
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taxa levy imposed by the government on GOODS and SERVICES (INDIRECT TAX) and the INCOME and WEALTH of persons and businesses (DIRECT TAX). The government uses taxes for a number of purposes such as:
- to raise revenue to finance government spending (see BUDGET);
- to promote social equity by redistributing income and wealth (see DISTRIBUTION OF INCOME);
- to regulate the level of total spending in the economy (see FISCAL POLICY);
- to protect domestic producers from imports (see TARIFF). See INCOME TAX, CORPORATION TAX, CAPITAL GAINS TAX, WEALTH TAX, INHERITANCE TAX, VALUE-ADDED TAX, CUSTOMS DUTY, EXCISE DUTY.