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An Introduction to Taxes: How You Pay and File
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tax withholding, just on the local level. Businesses that
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Reducing debt usually isn't a high priority for people until they have already gotten into trouble with overspending. Using a few basic guidelines, and debt calculations, can help you see when your debt load is getting into the danger zone.
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How to minimize your taxes on wealth
Taxes on wealth or simply wealth tax is the tax levied on the
value of wealth owned by a person. As the term 'wealth' carries
with it a broader meaning, generally capital transfer taxes
(which include inheritance tax and gift tax), property tax, and
capital gains taxes are some times invariably referred to as
wealth taxes.
Taxes on wealth were first introduced in Europe, aimed at
reducing the growing wealth gap between the rich and the poor.
It was meant to raise revenue for addressing pressing social
requirements and also to discourage the attitude towards
amassing wealth.
Still, in countries across the world, majority of wealth is
concentrated at the hands of fairly small number of people.
Ideally taxes on wealth cuts down the disparities in wealth
rather than the income, which actually is the determinant factor
on how the scales are weighed for the next generations. Also,
taxes on wealth can bring about vertical as well as horizontal
equity, which income tax fails to achieve. For example, neither
a wealthy person nor a poor one with no income will pay income
tax. But the wealthy ones need to cough up wealth tax while the
poor need not.
But, as critics puts down, taxes on wealth can actually cause
inefficiency by discouraging wealth producing economic
initiatives. Also, the revenue generated by imposing taxes on
wealth may not be that productive as the theory suggests.
Associated Websites
The
wealthiest form only a small percentage of the population and by
nature they are adept at avoiding taxes while remaining
themselves within the contours of law.
Taxes on wealth comes in two forms - the capital transfer taxes
that are levied when wealth change hands and the annual wealth
taxes. Capital transfer taxes can occur either at death - also
called inheritance tax - or via donation (gift tax). Some people
tend to believe that Capital Gains tax to be a form of taxes on
wealth. But in realty, capital gains tax is the taxation on the
income obtained on capital and not a wealth tax on the capital.
Ideally, taxes on wealth should not be severe on the tax payers
even if they have lots of wealth. Instead, after the minimum
slab of no taxation, the taxes on wealth percentage should
increase at increments, depending on the value of wealth in
dollars. Such a fairer taxation not only increases the revenue
but also goes a long way in bringing down the inequality aspect
as well.
But with intelligent investing, one can save a lot that other
wise goes as wealth tax. But that requires careful thought and
advanced planning. May be a tax professional could help one in
this regard.
About the author:
Jakob Jelling is the founder of http://www.cashbazar.com. Visit
his website for the latest on personal finance, debt
elimination, budgeting, credit cards and real estate.
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