Taxation may be a term for when a taxing authority, usually a government, levies or imposes a tax. The term "taxation" applies to all or any sorts of involuntary levies, from income to capital gains to estate taxes.

The whole point of taxes is to boost money to assist buy programs and services authorized by state and federal governments. Here are some samples of what your federal and state income taxes help to supply . Federal taxes help pay for: National defense – Securing America and protecting its interests overseas.

The Wealth of Nations (1776), Adam Smith argued that taxation should follow the four principles of fairness, certainty, convenience and efficiency. Fairness, in that taxation should be compatible with taxpayers' conditions, including their ability to pay in line with personal and family needs.

As nouns the difference between taxation and tax is that taxation is the act of imposing taxes and therefore the fact of being taxed while tax is money paid to the government other than for transaction-specific goods and services.

Income tax is a tax on your income, wages and earnings. The federal uses a tax with seven marginal tax rates. It collects income tax over the course of the year. For most people, income tax comes out of your paycheck.