Understanding the Income Tax

and Indirect Taxation

Scroll down and watch each animation one at a time. 

Notice who is responsible for making the Tax returns and who doesn't make returns .  (customers)

Indirect Tax - General characteristics

1. Can be passed on to customer
2. Exercising a licensed privilege
3. Can be avoided –
   1. avoid taxable activity
   2. avoid privileged goods

Example #1 indirect tax - Alcohol Tax 

AlcoholIndirectAnimation.swf

Example #2 indirect tax - Import Tax

ImportTaxes.swf

Example #3 indirect tax - Corporate Excise Tax

AcmeCorpIndirect.swf

Example #4 Direct tax - Tax on Everybody

DirecttaxAnimation.swf

Direct Tax

General Characteristics

1. Cannot be avoided
2. Applies to everybody

Now for the Mega Important United States Supreme Court decision about the meaning of income tax and the proper application of the 16th amendment.

Example #5 Indirect tax - Tax does not apply to everybody

Joy'sCamera.swf

That was the intent of Indirect Taxation.  That way, People are free to live with minimum government interference.  You would NOT have to ...

1. Keep Books and records
2. File returns
3. Worry about audits
4. and all the jail time for not doing it correctly. 

Everything you probably buy today is purchased from a faceless corporation. This would also boost the American unincorporated small business while putting the brakes on Mega Monopoly Big Business. There is no need to create another tax like the Fair Tax.  A fair tax already exists if it was used properly.

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