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A statutory tax rate is the legally imposed rate. An income tax could have multiple statutory rates for different income levels, where a sales tax may have a flat statutory rate. [2] The statutory tax rate is expressed as a percentage and will always be higher than the effective tax rate. [3]
An income tax is a tax imposed on individuals or entities (taxpayers) in respect of the income or profits earned by them (commonly called taxable income). Income tax generally is computed as the product of a tax rate times the taxable income. Taxation rates may vary by type or characteristics of the taxpayer and the type of income.
An economic definition, by Atkinson, states that "...direct taxes may be adjusted to the individual characteristics of the taxpayer, whereas indirect taxes are levied on transactions irrespective of the circumstances of buyer or seller." [31] According to this definition, for example, income tax is "direct", and sales tax is "indirect".
Tax exemption generally refers to a statutory exception to a general rule rather than the mere absence of taxation in particular circumstances, otherwise known as an exclusion. Tax exemption also refers to removal from taxation of a particular item rather than a deduction. International duty free shopping may be termed "tax-free shopping". In ...
A corporate tax, also called corporation tax or company tax, is a type of direct tax levied on the income or capital of corporations and other similar legal entities. The tax is usually imposed at the national level, but it may also be imposed at state or local levels in some countries.
A statutory employee is an independent contractor under American common law who is treated as an employee, by statute, for purposes of tax withholdings. [1] For a standard independent contractor, an employer cannot withhold taxes.
In modern public-finance literature, a whole economy of the tax system has developed (tax system economics), which can be defined as "the overall management of public revenue of a state or integration grouping's public revenues and expenditures in order to shape smart economic policies that stimulates economic growth and development and ...
In economics, tax incidence or tax burden is the effect of a particular tax on the distribution of economic welfare. Economists distinguish between the entities who ...