what is taxation 
taxation is a term for when a taxing authority usually a government levies or imposes a financial obligation on its citizens or residents paying taxes to governments or officials has been a mainstay of civilization since ancient times the term taxation applies to all types of mandatory levies from income to capital gains to estate taxes though taxation can be a noun or verb it is usually referred to as an act the resulting revenue is usually called taxes investopedia julie bangunderstanding taxationtaxation is differentiated from other forms of payment such as market exchanges in that taxation does not require consent and is not directly tied to any services rendered the government compels taxation through an implicit or explicit threat of force taxation is legally different than extortion or a protection racket because the imposing institution is a government not private actors tax systems have varied considerably across jurisdictions and time in most modern systems taxation occurs on both physical assets such as property and specific events such as a sales transaction the formulation of tax policies is one of the most critical and contentious issues in modern politics taxation in the united statesthe u s government was originally funded on very little direct taxation instead federal agencies assessed user fees for ports and other government property in times of need the government would decide to sell government assets and bonds or issue an assessment to the states for services rendered in fact thomas jefferson abolished direct taxation in 1802 after winning the presidency only excise taxes remained which congress repealed in 1817 between 1817 and 1861 the federal government collected no internal revenue 1an income tax of 3 was levied on high income earners during the civil war it was not until the sixteenth amendment was ratified in 1913 that the federal government assessed taxes on income as a regular revenue item 2 as of 2024 u s taxation applies to a wide range of items or activities from income to cigarette and gasoline purchases to inheritances and when winning at a casino or even nobel prize 345purposes and justifications for taxationthe most basic function of taxation is to fund government expenditures varying justifications and explanations for taxes have been offered throughout history early taxes were used to support the ruling classes raise armies and build defenses often the authority to tax stemmed from divine or supranational rights later justifications have been offered across utilitarian economic or moral considerations proponents of progressive levels of taxation on high income earners argue that taxes encourage a more equitable society higher taxes on specific products and services such as tobacco or gasoline have been justified as a deterrent to consumption advocates of public goods theory argue taxes may be necessary in cases in which the private provision of public goods is considered sub optimal such as with lighthouses or national defense different types of taxationas mentioned above taxation applies to all different types of levies these can include but are not limited to 6