Which term is used for taxes on the income and wealth of individuals and firms?

Which term is used for taxes on the income and wealth of individuals and firms?

• A. Direct Taxes
• B. Indirect Taxes
• C. Subsidy
• D. Tax

Answer: (A)

Direct taxes are taxes on the income and wealth of individuals and firms. They are paid directly to the government by the person or company that earns the income or holds the wealth, and the amount often depends on ability to pay. Common examples are income tax and corporate tax. Indirect taxes, by contrast, are on goods and services and are typically paid through prices to consumers. A subsidy is a payment from the government, not a tax. A tax is a broad term, but the specific kind that targets income and wealth is direct taxes.

Direct taxes are taxes on the income and wealth of individuals and firms. They are paid directly to the government by the person or company that earns the income or holds the wealth, and the amount often depends on ability to pay. Common examples are income tax and corporate tax. Indirect taxes, by contrast, are on goods and services and are typically paid through prices to consumers. A subsidy is a payment from the government, not a tax. A tax is a broad term, but the specific kind that targets income and wealth is direct taxes.