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Figure 6.3 Taxes and Jurisdictions
KEY TAKEAWAYS
- Governments at all levels use taxes as a source of financing.
- Taxes may be imposed on the following:
o Incomes from wages, interest, dividends, and gains (losses), rental of real or intellectual property.o Consumption of discretionary and nondiscretionary goods and services.o Wealth from
asset ownership, asset transfer after death.- Taxes may be
o progressive, such as the income tax, in which you pay proportionally more taxesthe more income you have;o regressive, such as a sales tax, in which you pay proportionally more taxes theless income you have.
EXERCISES