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The primary sources of government revenue are income, sales, and property taxes.

There is an increasing interest in taxes on energy consumption.

Excise taxes are sales taxes on individual commodities, services, or transactions such as motor fuel, cigarettes, or home sales.

States charge fees for the use of certain services. These fees are based on the principle that people should pay according to the benefits they receive.

Taxes can be complicated. And they can pose compliance issues. Sometimes noncompliance is unintentional, but other times it is intentional.

The mainstay of local taxation is the tax on real estate, known as the property tax. It is used to fund an array of state and local services, most notably public schools.

How to improve the tax code is the subject of much debate. Proponents of reform often call for increasing fairness and simplicity.

State and local governments issue bonds to finance important projects that meet social goals and benefit communities.

Raise adequate revenue—the tax system must produce enough revenue to pay for important national, state, and local priorities.

Policymakers use the tax system to raise revenue and to promote social policy goals. For example, they may want to encourage desirable behaviors, such as home ownership.