Understand how tax laws work, how they affect the economy, and the ways in which they can be used to achieve fiscal and social goals.

Frequently Asked Questions
  • Do nonprofit organizations pay taxes?

    Nonprofits that meet IRS criteria are exempt from federal taxes, as well as from property and sales taxes. They do pay payroll taxes and may owe taxes on activities that are not part of their nonprofit goals, such as selling products in a museum gift shop.

  • What makes Delaware a tax shelter?

    Delaware is a tax shelter because it has business-friendly usury laws and light taxation, and because companies incorporated there don’t have to conduct their business in Delaware. Delaware also has a separate court system for corporate litigation.

  • Does setting tariffs protect domestic industries?

    Tariffs are meant to protect domestic industries by putting taxes on imported products made by foreign competitors to make them cost more. They can also erode competitiveness in the protected industry.

  • Where do tax havens get revenue?

    Most governments get revenues through taxation. Tax havens, however, rely on customs and import duties, corporate registration and fees, and departure (airport) taxes on travelers.

  • How does the IRS find out that someone is cheating on their taxes?

    Computer data analysis is the key tool—using its own Information Returns Processing system, plus medical records, credit card transactions and other electronic information, including, possibly, social media postings.

  • Who has to worry about the chicken tax?

    Hint: It isn’t chickens. Or chicken farmers. The chicken tax is a 25% tariff on light truck imports originally imposed in 1963 to retaliate against European tariffs on American chicken. It still exists.

Key Terms

Explore Tax Laws

1040 Tax form surrounded by dollar bills
Tax Revenue Definition
Tampons
What Is the Tampon Tax?
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Free Trade Agreement (FTA) Definition: How It Works, With Example
Value-Added Tax (VAT) Definition
Goods and Services Tax (GST): Definition, Types, and How It's Calculated
Tax Forms, Pencil and Receipts
Regressive Tax
Taxation Defined, With Justifications and Types of Taxes
Container Cargo Ship and Cargo Plane With Working Crane Bridge in Shipyard at Sunrise
Introduction to Section 232 of the Trade Expansion Act
Calculator and tax forms
Understanding Section 1250
Businessmen Reading Blueprints in Empty Warehouse
How Do Tariffs Protect Domestic Industries?
Why Delaware Is Considered a Tax Shelter
Ability-To-Pay Taxation
Double Taxation
Paperwork
What Is the Tax-to-GDP Ratio?
Senior man working in a greenhouse
Economic Growth and Tax Relief Reconciliation Act of 2001 (EGTRRA)
World map
What Is FATCA?
Caucasian politicians talking in capitol building
How Did the Biggest Tax Hike in U.S. History Affect the U.S. Economy?
Tax-Advantaged
Last will and testament
Why the Generation-Skipping Transfer Tax Won't Hurt You (Probably)
Ronald Reagan Giving Campaign Speech
Economic Recovery Tax Act of 1981 (ERTA)
Pump Priming Definition
What Are Common Reasons for Governments to Implement Tariffs?
What Is a Surtax?
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IRS Publication 15-A: Employer's Supplemental Tax Guide
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Canada Revenue Agency (CRA)
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Advance Corporation Tax (ACT)
Facade of a government building, Internal Revenue Service building, Washington DC, USA
Loss Disallowance Rule (LDR)
Houses, a map and a HMRC Stamp Land Duty Tax form
Stamp Duty Land Tax (SDLT)
Ten pound notes
Tax And Price Index (TPI)
Do Nonprofit Organizations Pay Taxes?
The United States Capitol
Jobs And Growth Tax Relief Reconciliation Act of 2003 (JGTRRA)
Cigarette
Tobacco Tax/Cigarette Tax
Three wood blocks spelling tax on tax forms
What Is the Protecting Americans From Tax Hikes (PATH) Act?
HM Revenue and Customs (HMRC)
Disclosure of Tax Avoidance Schemes (DOTAS)
Tax Reform Act of 1986
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Fiscal Cliff Definition
Working With Tax Return Form
Border Adjustment Tax (BAT)
Tax Forms, Pencil, and Receipts
Tax Arbitrage
Clearance Certificate Definition
Toronto Downtown
What is Canada's Harmonized Sales Tax (HST)?
MLPs and Limited Partnerships: How They Differ
Cash dividends literally represent money sent to you in the mail or direct deposited into your bank account. The goal of successful investing is to be able to have cash dividends pour into your life regularly so you don't need to work unless you desire.
Accelerated Cost Recovery System (ACRS)
Hidden Taxes
Defining Pick-Up Tax
Airport people waiting in the line
183-Day Rule
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What Is Dynamic Scoring?
Detail of Capitol Building With Red, White, and Blue Balloons
Formal Tax Legislation
Windfall Tax
tax lien
How Does a Tax Lien Work?
What Is the Kiddie Tax?
Corporate executives conduct a meeting.
What Is a Taxable Spinoff?
IRS Publication 78
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What Is a Tax Lien Foreclosure?
Tax-Free Spinoff
You can use your annual gift tax exemption to lower estate taxes by reducing the value of your estate.
Welfare Loss Of Taxation Definition
Financial Advisor Planning With Clients at Office
Ability to Pay
Abatement Definition
Solidarity Tax
Public works project
What's a Special Assessment Tax?