A fee charged ("levied") by a government on a product, income, or activity. 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.

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When John moved to California he wasn't prepared for the sales tax that awaited him, he was annoyed that all his purchases would cost more than the price tag.

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Many customers are unhappy with paying taxes on the items that they purchase; however, taxes are used by the government to help provide services and to improve their community.

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