Taxation Direct and Indirect taxes Essay Example | Topics and Well Written Essays - 2500 words

Taxation Direct and Indirect taxes - Essay Example There are a number of different terms for taxation and indeed taxation takes on many special sub categories. For example there are capital gains tax   which according to Reynolds (1999) represents a special tax placed on capital gains which are profits recognized from the sale of assets purchased at a lower price such as properties, commodities etc. A second example would be a corporate tax which is a specialized tax placed directly on a corporation or other such business entity (Depending on the jurisdiction). A third example would be an inheritance tax which can be any sort of taxes levied after the death of an individual. Tariffs often form an important element of taxation as it represents a specialized tax levied on the importation of goods or the movement of goods through a nation’s borders (this may hold special significance in an increasingly globalized economy). A last example of a specialized tax is called a toll which is some sort of fee levied for the right to tra vel on a maintained road or waterway, in this regard the income received from such a tax would typically be used to maintain the condition of the passageway.   What is important to keep in mind is that any particular jurisdiction may have any number of direct, indirect or specialized tax used in any combination to suit the needs of the local citizenry. In this regard taxation can be tailored to meet the specialized needs of a particular area. According to Smith (1776) it is the case that every state ought to contribute towards supporting.