The tax base comprises the items, values, and activities subject to tax calculation according to prevailing statutes in a jurisdiction.
Common Bases:
- Individual income levels and brackets in personal income taxes
- Profits earned by companies as levied by corporate income taxes
- Real estate property values driving real property tax bills
Example:
A national government expanded its sales tax base by including more services alongside goods to broaden revenue streams.
Takeaways:
Defining appropriate tax bases requires balancing policy aims with equitable treatment of various constituents. Regular reviews monitor economic shifts and comparative international standards to optimize fairness and sufficiency over time.