We explain what taxes are, the elements that compose them and the types that exist. Also, what is its function and various examples.
What are taxes?
Taxes, charges or tributes are a payment obligation that the Condition imposes on its citizens, without there being a direct consideration for goods or services. Its purpose is primarily to finance public sector activities that are of common benefit.
All citizens of a State must, in one way or another, comply with the payment of certain taxes. For this, the principle of contributory capacity is used, which establishes those who have more resources, must provide a greater amount of resources than those less favored, in order to achieve a society with more equity social and economic.
Those who fail to pay taxes are sanctioned by the State itself, either through fines and new impositions or, eventually, jail terms, as established by law. tax law of bliss nation. The specific regulation of a nation's taxes is known as the tributary system or fiscal system.
What are taxes for?
Taxes, as we have said, in principle serve to financially support the State. Next to the Business public and income Of other types, the collection is the mechanism par excellence of financing of the public, so that, among all the citizens of a country, they support the activities that are of common benefit and they are not for profit.
However, taxes can also serve other purposes, such as discouraging certain business dynamics. consumption, in what is usually considered as internal protection mechanisms (or protectionist measures).
In these cases, the State places taxes on certain imported products to make their cost and thus defend local producers, who otherwise could not compete commercially. Taxes can also be assigned to make certain types of goods more expensive. products considered harmful to Health or whose use seeks to discourage, such as cigarettes or alcohol.
Finally, taxes on income and Profits Sudden events are intended to allocate to the State a portion of the monies earned by the richest in society or by those who win bets or the lottery, in order to fight against the concentration of capitals only one social class or a small set of persons.
Tax elements
All taxes consist of the following elements:
- Taxable event. It is the motivation of the tax, that is, the reason why we must pay.
- Passive subject. They are all people (natural or legal) who must face the obligation to pay taxes.
- Tax base. The amount on which the taxes to be paid are calculated.
- Tax type. The proportion or percentage that is calculated, depending on the case, by means of formulas that govern how and how much it corresponds to pay.
- Tax rate. Finally, it is the amount to pay for tax purposes.
Tax types
Indirect taxes such as VAT are added to the price.
There are different types of taxes and different ways of classifying them, for example:
According to your type of lien:
- Proportional or flat taxes. Those that always impose a fixed rate or percentage, regardless of the context of the tax.
- Progressive taxes. Those who increase the tax calculation percentage as the profit or income increases.
- Regressive taxes. Those that decrease the tax calculation percentage as the profit or income is higher.
According to your taxable event:
- Direct taxes. Those that tax sources of wealth, property or income, such as taxes on income, or on the possession of certain assets.
- Indirect taxes. Those who tax the consumption, without affecting the income of wealth of a taxpayer, but adding to the price of a good or service, as is the case of the value added tax, or the tax on tobacco and alcohol.
According to your considerations regarding the taxable person:
- Objective taxes. Those who do not take into account the conditions of the taxpayer when calculating their tax rate.
- Subjective taxes. Those that allow the taxpayer to demonstrate mitigating factors, obligations of another type and justify a decrease or a different calculation in their tax rate.
According to its temporality:
- Instant taxes. Those that are charged at the moment of carrying out a commercial operation, generally because they are already incorporated into the final price of the product or service.
- Periodic taxes. Those that must be paid within certain limits or periods established by the State and announced in advance, so that the taxpayer can receive discounts for payment on time or surcharges for payment late.
Examples of taxes
Some common examples of taxes are:
- Value Added Tax (VAT). Also known as Value Added Tax or Reduced Value Tax, it is an indirect and regressive tax, which is usually imposed on goods and services that are not essential or are not part of the basket of protected products, if any.
- Tax on heritage. Sometimes called the wealth tax or the wealth tax, it is an individual tax calculated on the personal assets of natural or physical persons, estimating a total value of absolutely all the assets that you own.
- Income tax. This tax is perhaps the most important of any tax system, and is imposed on the profits and profits of natural and legal persons, whether in a flat, progressive or regressive way. It generally has a taxable minimum that prevents the lowest earning people in society from being charged.
- Inheritance and gift tax. As its name indicates, this tax is levied on assets acquired through inheritances, gifts, bequests or donations, as long as they meet certain legal requirements, such as a free reception or mortis causa (that is, after the death of another).