In most countries, government raise much of their revenue by taxing the income of their citizens. Usually, a graduated tax is imposed, which rises as a citizen’s income rises. Graduated taxation systems feature a number of varying tax rates. As taxable income crosses a number of threshold levels, the new (and usually higher) tax rate will kick in, meaning that all income above the threshold levels is taxed at the new rate. This can mean that a person with a high income, which crosses a number of taxation value thresholds, maybe be paying tax on his or her income at several different tax rates.

Taxation rates are also applied to other kinds of taxes such as Value Added Tax, but it is more common for these taxes to be single static values rather than graduated in nature.

Corporation tax is usually levied as a standard single rate, rather than in a graduated series of rates as is common with income tax. It is often the case that some companies are charged at special rates, however. For example, governments may decide that they want to support the growth of small companies and so charge them a lower rate of corporation tax than large companies. Companies which exist only to invest in other companies, such as unit trusts for example, are often also charged corporation tax at a lower rate.

In most legal dispensations, companies are allowed to offset many costs incurred in the course of doing business against their taxable income before corporation tax is charged on it. For example, money spent on research and investment can often be written off against tax liabilities in whole or in part.

Other offences on public transport systems for which fines may be levied include : using the emergency stop facilities of the vehicle when there is not a genuine case of emergency; smoking in an area which has been designated as a non-smoking area; dropping litter on the public transport vehicle or station; offensive behaviour to staff or other passengers; trespassing into areas not open to members of the general public.

In some areas, drinking from bottles may be banned on public transport; in others, drinking alcohol in any form may be prohibited. Fines will be imposed for failure to follow these regulations.

After receiving a fine, the person involved will usually not have to pay right away, but will be given a certain amount of time in which to make the payment.

When inheritance tax is applied, there is typically a certain amount that can be transferred without paying tax. Above that threshold value, the tax will be applied. There are usually cases where bequests are exempt from inheritance tax. For example, when assets are transferred to a spouse, no tax need be paid. Other exemptions may apply to charitable bequests. Dispositions of assets in the years preceding death can also be subject to inheritance tax so giving it all away before the end is not necessarily enough to escape the tax man’s clutches.

In modern times, the use of tariffs is quite rare. A web of international agreements has meant that trade between nations is far freer than it was before. When tariffs are imposed, it is almost never for the purpose of raising revenue per se, but because the tariff-imposing nation feels that the other country has acted unfairly in some way in its economic policies, perhaps, for example, by subsidising the industry which is producing the imported goods, meaning that it is not subject to normal economic restraints.

Sales taxes should be applied only to goods purchased by consumers, not by other businesses. For example, if a furniture-making company buys a quantity of lumber for use in manufacturing furniture, it should not have to pay any sales tax on the transaction.

A sales tax is very similar to a value added tax. The key difference is that a sales tax is charged only at the point of final sale of a product to the consumer while value added tax is charged at every stage of the business process when one business trades with another. The business may be entitled to a refund of what it pays other businesses in value added tax but the tax must be levied in the first place before the business applied for a refund to the government. For this reason, value added taxes tend to involve more record-keeping than sales taxes and to impose a significant bureaucratic burden.

In almost all cases, income tax is applied in a series of graduated bands, meaning that as a citizen’s income rises, his income above certain threshold values would be taxed at a gradually increasing rate. At very high incomes, it is even possible that the majority of any income gains a person benefits from will go to the government rather than to the income earner.

The existence of income tax necessitates an elaborate system of reporting and checking through which citizens declare their annual income to the government and those declarations are scrutinised to make sure that they are accurate. Penalties for untruthfulness or evasion of tax responsibilities include fines and imprisonment. In some cases, income tax responsibilities are handled by employers, who deduct the appropriate amounts from their employee’s wages before the employee receives them and forward this money to the government. In this context, it may not be necessary for the employee to file a personal tax return with the government because it will all be taken care of automatically.

This form of taxation usually requires a system of inspection whereby local government officials grade the property according to its presumed value, so that the property owner can then be charged at the appropriate rate.

Property taxes have been politically controversial for the simple reason that not everyone owns property. Since local governments are elected democratically and since the great bulk of local government expenditures are often financed by property taxes, it is therefore theoretically possible for a non-property owning majority to elect a government which would engage in lavish spending projects financed only by a minority. There is a potential for exploitation here which has been recognized by politicians of some countries, who have moved towards a local government household tax rather than a property tax per se.

Property taxes can also create tension when an area experiences dramatic rises in property values generally. In that case, households which may not be particularly wealthy, and who may have acquired a house when it was inexpensive, may find themselves being charged a very high rate for their home which is now worth much more. In extreme cases, households can find themselves driven out of their own home because of their inability to afford the higher property taxes.

Tax avoidance is extremely widespread, particularly among the wealthy. It is, of course, perfectly natural for tax-payers to wish to keep as much of their own money as possible and to seek out ways to do it. In most cases, tax avoidance will be facilitated by a professional accountant. Few ordinary tax-payers have the expert knowledge required to understand the intricacies of the tax system so well that they can make judgements about the best ways to avoid paying tax. Successful tax avoidance is usually accomplished through figuring out loopholes in the tax system and exploiting them so as to minimize the tax burden. The details of what can be done to avoid taxes naturally vary greatly from one country to another, since each country has its own separate tax system with unique features of its own.

Tax avoidance is not simply a personal thing but can also be performed by corporations.

Value Added Tax is a major component of taxation in most European countries. In France, where the tax was first invented, it is, in fact, the principal means of raising revenue for the government.

Rates differ between countries but typically value added tax is charged at between 10-25% of the value of a sale. Governments often levy value added tax at a reduced rate on some goods and, in a few cases, goods may be exempt from it entirely.

Sometimes businesses quote product prices in which value added tax has already been factored in; sometimes the VAT amount is shown only when the sale is processed.