How is income tax defined in relation to taxing principles?

Income tax is defined as a tax imposed on an individual or entity's earnings, which encompasses wages, salaries, dividends, interest, and other forms of income. This form of taxation is based on the principle that those who earn more should contribute a larger share of their income to the government, thus aligning with the concept of vertical equity in taxation.

Income tax is a critical component of a government's revenue system, allowing for the funding of various public services such as education, healthcare, and infrastructure. This form of taxation can be progressive, where higher income levels are taxed at increased rates, or it can be flat, where all income is taxed at the same rate.

Other forms of taxes, such as property taxes, sales taxes, and taxes on foreign income, serve different purposes and are levied based on different principles. Property taxes focus on ownership rather than earnings, sales taxes target transactions made in the market, and taxes on foreign income apply to earnings generated outside the taxpayer's resident country. Understanding the definition and principles surrounding income tax is fundamental to grasping the broader context of taxation as a whole.