Most of us know about taxes not because we’ve studied up to become experts, but because we have to file our income tax once per year. Yet even a brief examination of U.S. tax terms can prove entertaining. It turns out there’s more to taxes than meets the eye (or the paycheck).
From “ability to pay” to “withholding,” the Internal Revenue Service (IRS) has compiled a comprehensive dictionary of tax terms for students wanting to know more about where their money goes. We’ve scoured the list and pulled out several of our favorites for your reading enjoyment.
Excise tax: This might sound like a surgical tool at a doctor’s office, but it actually refers to a tax on the “sale or use of specific products or transactions.”
Luxury tax: You might pay this one if you own a yacht. This is paid on expensive goods and services the government deems nonessential.
Mass tax: Sounds like a physics term, right? In fact, simply means a “broad tax that affects a majority of taxpayers.”
Proportional tax: No, this isn’t a tax based on your body shape; rather, it means a tax that requires the same level of income from people earning a similar amount of money.
Sin tax: Alcohol and tobacco are subject to this tax. We’ll refrain from commenting!
For more quirky and compelling terms, click here to visit the complete list.