Tax! It's such a little word.But the best of us find it terrifying.Perhaps it's because we know so little about it. And that's a pitty.
A tax may be defined as a "pecuniary burden laid upon individuals or property to support the government, a payment exacted by legislative authority."
A tax "is not a voluntary payment or donation, but an enforced contribution, exacted pursuant to legislative authority" and is "any contribution imposed by government.
If tax is levied directly on personal or corporate income, then it is a direct tax.
If tax is levied on the price of a good or service, then it is called an indirect tax.
The purpose of taxation is to finance government expenditure. One of the most important uses of taxes is to finance public goods and services, such as street lighting and street cleaning. Since public goods and services do not allow a non-payer to be excluded, or allow exclusion by a consumer, there cannot be a market in the good or service, and so they need to be provided by the government or a quasi-government agency, which tend to finance themselves largely through taxes.