Meaning and Application of Tax Law

Meaning of Tax Law

Tax law refers to the rules, policies, and procedures that oversee the tax process set by the government. Tax laws govern the charges on property, transactions, estates, and licenses paid to the government. The law also includes import duties on all goods bought from other countries and levies imposed on individuals by the government to boost the benefits of the state. The government income from the taxes is used to fund the government to deliver services such as building schools, hospitals, constructing roads, etc. Keep reading to learn more about the meaning and application of tax law.

Changes in Tax Law

The US state legislature and Congress are responsible for formulating most of the tax laws, and they change and update them from time to time. The proposed changes are then given votes to pass them. If the changes are passed, they become the law that you view on your tax returns. If anyone is keen on reading the tax laws during tax returns, you will notice annual changes to the form and instructions. For the last couple of years, the federal government imposed temporary income tax reductions and other incentives related to business tax to kindle the economy. At other levels, such as counties, states, and cities, property tax rates are adjusted annually, depending on the cost of government services and budget deficits.

Direct and Indirect Taxes

Tax law requires payment to be made to a minimum of four levels of government. The payments are either direct or indirect. Indirect taxes are applied on services and products that are consumed and are paid to an intermediary. For instance, when you buy bread from a local store, the retailer will charge you tax on the bread, which they will eventually pay to the government. In tax law, direct taxes are those that are paid directly to the government.  They are applied to things like income, land, and personal property.

Entities that create and enforce tax laws and collect tax revenue range from cities, local government, federal levels, municipalities, states, counties, and districts. There are also agencies, schools, transit districts, utility companies, etc.

To learn more about the meaning and application of tax laws, contact The Slaughter Law Firm. We specialize in tax law and can help you when you get in trouble with the law.