Tax is money that individuals and businesses pay to the government to help fund public services like education, healthcare, and transportation.
Why do we pay tax?
Maintaining the proper operation of our society depends on tax payment. Taxes fund public services such as free primary education and healthcare, making them available to everyone. This makes the community a better place overall.
One way to reduce economic disparity is through taxes. A progressive tax system requires people with higher salaries to pay a larger percentage of their income in taxes, ensuring a more equitable division of financial responsibilities. This helps level the playing field in terms of social and economic issues.
Direct tax and indirect tax
Direct taxes are those that individuals and corporations pay directly to the government, such as income tax and corporate tax.
Sales of goods and services are subject to indirect taxes. This includes the goods and services tax (GST), which is tacked on to the cost of the majority of Australian goods and services. The passenger movement charge, gasoline excise taxes, customs charges, and wine and alcohol taxes are examples of additional indirect taxes. Those who purchase these goods and services are typically impacted by these taxes.