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

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Canada Revenue Agency (CRA)
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Green Levy
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Advance Corporation Tax (ACT)
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Loss Disallowance Rule (LDR)
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Stamp Duty Land Tax (SDLT)
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Jobs And Growth Tax Relief Reconciliation Act of 2003 (JGTRRA)
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Fiscal Cliff
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Harmonized Sales Tax (HST): Definition as Canadian Sales Tax
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Hidden Taxes
Pick-Up Tax
Pick-Up Tax
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