Taxation consists of mandatory payments from taxpayers to the state.

For questions on tax policy and its surrounding politics.

Common forms of taxation are income taxes (personal income, capital gains, corporate), taxes on goods and services (value-added or final-sale taxes, excise taxes), and property taxes (real property, wealth, inheritance).

Taxation is most basically used to derive revenue to fund the state's operation. It is also used for its secondary effects: punitive taxation, taxation used as an incentive (e.g. protectionist tariffs, environmental taxes to reduce pollution, sin taxes on gambling or drugs, financial transaction taxes, Pigovian taxes), foreign policy (tariffs), wealth redistribution (progressive taxation, negative income tax). Proceeds usually go to the general fund, but are sometimes earmarked for some purpose (such as schools, infrastructure, or pensions).

Taxes are distinguished from government fees in that fees are paid in exchange for a specific government service provided, such as license fees, tolls, and park entrance fees, whereas taxes are paid regardless of whether you use a service.

See also