Tax income is the total amount of monetary resources that the public sector receives through taxes.
Tax income, tax income, and public income are very similar concepts. However, they are not the same. Often, in the media, we see how both concepts are used interchangeably.
We can limit tax revenues by saying that it is the part of public income that is collected through taxes. Of course, for that we must know what a tribute is. For example, a tax is a tribute, but a Social Security contribution is not.
Types of tax income
Tax income is that which comes from taxes. We can classify them into three large groups:
- Direct taxes: They are those that directly tax income or assets. That is, if you earn or have more, you pay more. An example of them is the income tax on individuals, the corporate tax and the wealth tax.
- Indirect taxes: These are taxes that tax consumption and, therefore, indirectly tax income. In this case, all taxpayers pay the same amount regardless of their income or assets. For example, taxes on tobacco, alcohol, fuel or pollution to the environment.
- Fees and other income: These are payments for which a direct consideration is received.
To learn more about tributes, we recommend reading the following article:
Difference in the concept of tribute by country
Not all countries have the same tributes and far from it have the same name.
For example, in Spain it is called value added tax (VAT), in Argentina it is known as value added tax (VAT) and in the United States there is no VAT as such, but something known as Sales Tax.
Another example is that of Mexico where what in Spain is known as the tax on patrimonial transfers and documented legal acts (IAJD) is called in Mexico the property acquisition tax (ISAI).
In the same way, the percentages applied to different types of taxes and their amount also change. Therefore, there are countries with fewer taxes and countries that are even considered as tax havens.