Taxes are the primary source of revenue for most governments. There are four different types of taxes:
- income taxes, which are taxes collected from an individual’s income
- general sales taxes, which are taxes collected from the retail price on items and/or services
- excise taxes, which are taxes collected on specific products (such as tobacco, alcohol, gasoline, etc.)
- ad valorem taxes, which are taxes that are based on the value of a property
There are three types of tax systems: proportional taxes, regressive taxes, and progressive taxes.