Taxes, in all forms, have been around since the dawn of mankind -basically, ever since people have joined together in communities. In this article we will look at the major elements that define taxes and explain everything you need to know about them.

Concept

The concept of taxation is simple. You take a community. No one will willingly give up a chunk of their money in order to help out the community. So, taxes aim to oblige all people equally to contribute to a fund which is used for community development. If there was no taxation, communities wouldn’t grow or evolve. While the concept was great in theory, in real life, only a small part of the money we pay actually ends back into our community. The rest are used to pay the politicians that are supposed to govern over the community.

All in all, even if not all of the money is used for community development or public services, taxation is good if managed properly.

Purpose of taxes

As stated above, the purpose of taxes is to take money from the community in equal share and use it for public services and basically community development. Without taxes, most public services like healthcare, police and others would have no funding. Taxes are necessary in any community but determining exactly how to manage them is a real challenge. Today we can easily see communities with extreme taxation system at both ends. The ultimate question is how much is a community prepared to be taxed and how much of that money is used back into the community.

Categories of taxes

It comes as no surprise that taxes come in a variety of forms and shapes. This categorization is meant to better distribute the tax load on the population based on how much value they have in the form of income or properties.

Taxes on income – very single stream of income has to be declared and a percentage of it has to be paid back as tax. Failure to do so will lead to fraud and criminal charges.
Taxes on property – Apartments and houses as well as any other properties you own have to be declared and taxed.
Taxes on goods and services – cars, boats and any other high value good or service you use is taxed.
Social security contributions
Other taxes

The purpose of the taxes is to take an equal percentage of money from everyone. So someone who is earning more will be charged more than someone who is poor.

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