Taxes
Definition
Taxes are mandatory payments imposed by governments on individuals, businesses, or other entities in order to finance public expenditures such as infrastructure development, education programs, healthcare systems etc.
Analogy
Think of taxes as membership fees you pay to be part of a club or organization. Just like the club uses the funds from membership fees to maintain its facilities and provide services, the government uses tax revenue to fund public goods and services.
Related terms
Income Tax: A tax levied on an individual's income, which is based on their earnings from various sources.
Sales Tax: A tax imposed on the sale of goods and services, usually calculated as a percentage of the purchase price.
Progressive Tax: A tax system where higher-income individuals are taxed at higher rates compared to lower-income individuals.
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