Taxation
In exchange for government services, people and businesses pay taxes on their incomes/ gains (any increase in wealth). So, the government collects taxes on behalf of its citizenry.
Taxation rate and service level
Some highly ’socialist’ countries (Eg: Scandinavian countries, France etc..) tend to have high taxation rates, and provide excellent services to their citizens in return. Other countries, like USA, have low taxation rates and in return provide low-quality public services.
Capital gains
The quirks of capital gains tax is explained elsewhere.
Tax rate discrimination
Based on residence
Income Tax rates are often different for legal residents and temporary visitors. IN USA, one is declared a US resident for tax purposes if he passes a ’substantial presence test’ (not counting days under exempt status- eg: foreign student/ scholar).
Progressive taxation
Entities earning more money (sufficiently large to fall in different bins/ ’tax brackets’) are usually taxed at a higher rate than others. This is essentially a means of income distribution - this is often done to increase the average well-being of citizens.
Sales tax rate discrimination
Some goods attract higher sales taxes than others. This is different from the tax paid by manufacturers on their income.
This is motivated by the fact that these goods (eg: electricity produced from fossil fuels, tobacco, alcohol) come at a cost to the environment or society or health which would not be otherwise factored into the item price.
Tax code ideals
Simplicity and loopholes
Economists accross the board agree that the tax code should be simple. The government wishing to earn money well and be fair should eliminate major loopholes: including concessions to the middle class such as mortgage tax exemption (which is discrimination against renters), health insurance contributions by employers etc..
Focus on consumption and pollution
Still others argue that corporate - perhaps even individual - income tax should be eliminated in order to spur the economic growth; instead consumption and pollution should be taxed.
Natural resources
Natural resources - such as petroleum or minerals - form another source of income to the government.
Renter economies
For many countries- eg: Saudi Arabia and Libya - they form the major part (98% in Lybia) of the economy. So, the government in such countries - especially if it involves undemocratic self-perpetuation - need not provide good services to its people/ industries as long as they maintain the natural resource exploitation industry in good health. They just provide enough to keep people calm - not necessarily economically productive.
Resource-rich countries which break this curse tend to find a way to ensure that no single entity has control of resources.
Import tariff
Aka customs duty. This is tax levied on the price of imported items.
Design factors
Complicated tariff rules form as a result of lobbying by industry groups within the country (aka protectionism by the government), while the desire to increase exports lead to international agreements requiring lowering tariffs.
It can also be a international politics instrument.
Enforcement
Manufacturers could be lying about the make of their products in order to incur lower tariffs. Or, smugglers could be importing goods without paying tariffs.
Inspectors and scientists working at ports test products and ensure that tariffs are applied.