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Policymakers use the tax system to raise revenue and to promote social policy goals. For example, tax breaks may be provided to encourage home ownership.

How to improve the tax code is the subject of much debate. Proponents of reform often call for increasing fairness and simplicity. But people define those concepts in different ways. 

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

State and local governments 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.

Taxation is the primary way governments fund essential programs and services. The following principles support this goal while also ensuring equity in how revenues are raised. 

Taxes are complicated. Compliance often poses challenges.