ad valorem tax

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Word: Ad Valorem Tax

Part of Speech: Noun

Definition: An ad valorem tax is a type of tax that is based on the value of a good or service. The amount of the tax is calculated as a percentage of the price of the item. This means that the more expensive the item, the higher the tax will be.

Usage Instructions:

• Use "ad valorem tax" when discussing taxes related to property, sales, or goods.
• It is often used in economic or financial contexts.

Example:

• If you buy a car for $20,000 and there is a 10% ad valorem tax, you would pay an additional $2,000 in tax, making the total cost $22,000.

Advanced Usage:

• Ad valorem taxes are commonly applied to real estate and are used by governments to generate revenue based on the market value of property.
• In trade, ad valorem duties can be imposed on imported goods, where the tax is calculated on the value of the imported item rather than a fixed amount.

Word Variants:

• There are no direct variants for "ad valorem." However, terms related to taxation might include:
  • "Tax" (noun)
  • "Taxation" (noun)

Different Meanings:

• While "ad valorem" specifically refers to a type of tax, it can also be used in other contexts to describe things that are based on value rather than quantity.

Synonyms:

• Value-based tax
• Percentage tax

Idioms and Phrasal Verbs:

• There are no specific idioms or phrasal verbs directly related to "ad valorem tax," but you might hear phrases like "paying taxes" or "tax burden" in discussions about taxes in general.

Summary:

In summary, an ad valorem tax is a tax based on the value of something, where the tax amount increases as the price increases.

Academic

Noun

1. a tax levied on the difference between a commodity's price before taxes and its cost of production

Synonyms

• VAT
• value-added tax