Governments principally fund the operation of their economies and their public spending via taxation. Taxation is the money governments collect via legal obligations and a framework of sanctions, including criminal sanctions, on all eligible citizens and companies. It is levied in myriad different forms – including on income, on profits, on consumer purchases, imports, property, inheritances, gifts, and capital gains. Some schools of economic thought consider the coercive nature of government taxation as an official form of extortion.

Related terms