What are some examples of direct tax?
Quick Answer
Some examples of direct taxes include income taxes, taxes on assets and real property and personal property taxes. These are taxes that a person must pay directly to the entity collecting the tax. The taxpayer is not able to shift the burden of these taxes onto another individual or group.
Continue Reading
Full Answer
The income tax is an example of a direct tax because the person who owes the tax must pay it out of his own pocket. Property taxes must be paid by the property owner to the local municipality and therefore qualify as direct taxes also. Taxes on assets, which include estate taxes that the heirs to an estate must pay if the estate's value is over a certain amount, are also considered direct taxes.
Direct taxes contrast with another class of taxes known as indirect taxes. With an indirect tax, a person pays the tax to another organization or group that then turns the taxes over to the government.
The most prominent example of an indirect tax is the sales tax. When people purchase goods in certain states, they are required to pay a sales tax. They do not pay the tax directly to the state, however. The merchant collects the tax from the purchaser and then turns the money over to the government.
Learn more about TaxesRelated Questions
-
Q:
What kind of things are subject to the goods and services tax in Ontario?
A: The goods and services tax in Ontario applies to most Canadian goods and services as well as imported supplies, real property and intangible personal prope... Full Answer >Filed Under: -
Q:
What are the main sources of government income?
A: The main sources of government income are income, sales and property taxes and fees. State, county and local governments also receive grant money from the ... Full Answer >Filed Under: -
Q:
How do you use the H&R Block tax estimator?
A: The H&R Block tax estimator calculates your income, expenses and deductibles to determine the approximate amount of taxes you owe or should be refunded, no... Full Answer >Filed Under: -
Q:
What is the federal tax rate?
A: The federal tax rate is the percentage at which taxes are paid on income. In the United States, the tax rate varies between tax brackets, or ranges of inco... Full Answer >Filed Under:
You May Also Like
-
Q:
What are some examples of entrepreneurship?
-
Q:
What is typically included in a penalty abatement letter?
-
Q:
How do taxes in Maryland differ from other states?
-
Q:
How do you obtain a copy of your tax return from the IRS?
-
Q:
What are some examples of silicate and nonsilicate minerals?
-
Q:
What are some things about the Ontario provincial sales tax?
