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                                                   Tax Vocabulary

Ability to pay: The more you make the more you pay.

Direct tax: A tax levied on a person or business that is not passed on to others (example: income tax).

Fair-share: Each person pays only his fair share of taxes.

Hidden tax: Taxes you are not aware of paying.

Indirect tax: A tax passed on to others (example: gasoline tax).

Incidence of Tax: The amount of a tax that ultimately falls on households, irrespective of whom initially pays the tax. i.e. a tax on a business activity or product that passes to the consumer.

Tax: A compulsory contribution of money made to government to provide for services for the common good.