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	Tax Tariff   Property Taxation: Depreciation Taxation of Profit Adjusted Basis Home Mortgage Interest and Points Deduction   1031 EXCHANGES Capital Gains Tax Corporate Tax Corporation Dividend Tax Double Taxation European Union Savings Taxation Homeowners exemption Foreign Investment in Real Property Tax Act. Flat Tax Principles of Income Tax Income taxes Inheritance Tax Installment Sales Poll Tax Progressive Tax Property taxes California Propositions Purposes and Effects of Taxation Retirement Tax Sales Tax Sales leaseback Tariff Tax Credit, Exemption Equivalent and Tax Tax Rates Tax Treaty Direct and Indirect Taxation Value Added Tax A tax levied on imported goods is referred to as tariff. When a ship arrives in port, a customs officer inspects the contents and charges a tax on each of the contents based on the tariff formula. Since the goods cannot be landed in the marketplace until the tax is paid it is known to be one of the easiest taxes to collect, and the cost of collection is also comparatively small. Smugglers of course, seek to evade the tariff. o While an ad valorem tax is calculated as a percentage of the value of the item, for example, 15 cents on the dollar, a specific tariff is charged at a particular amount per weight, say $7 per ton. o A revenue tariff refers to a set of rates designed primarily to raise money for the government. A tariff on coffee imports, for example (by a country that does not grow coffee) ensures a steady flow of revenue. o A protective tariff is intended to unnaturally inflate the prices of imports and protect domestic industries from foreign competition. For instance, a 50% tax on a machine that importers formerly sold for $200 and now sell for $300. Without a tariff the local manufacturers could only charge $200 for the same machine; now they can charge up to $299 and make the sale. A prohibitive tariff therefore is one that is so high that no one imports any of that item. The line demarcating protective and revenue tariffs is very fine - while protective tariffs, in addition to protecting local producers also raise revenue, revenue tariffs produce revenue but they also offer some protection to the local producers. A pure revenue tariff therefore is a tax on goods not produced in the country, an example of which would be coffee perhaps. Taxes, tariff and trade rules in modern times are usually set together because of the common impact they have on industrial policy, investment policy, and agricultural policy. The concept of a trade bloc is hence formed, which is a group of allied countries agreeing to minimize or eliminate tariffs against trade with each other, and possibly to impose protective tariffs on imports from outside their bloc. Another concept is that of a customs union, members of which have a common external tariff, and according to an agreed formula, the participating countries share the revenues from tariffs on goods entering the customs union. If a country's major industries lose out to foreign competition, the loss of jobs and tax revenue can have severe detrimental effects on parts of that country's economy. The implementation of protective tariffs has been used as a measure against this possibility. However, protective tariffs have disadvantages as well; the most notable among these is the fact that they increase the price of the goods subject to the tariff, discouraging continued patronage from its consumers, who might abandon this product for a competitor's. An example of this is a tariff on food which can increase poverty, while a tariff on steel can make automobile manufacture less competitive. They can also cause undesirable effects in countries whose trade is disadvantaged by the tariff, and hence begin to impose tariffs of their own, which would in turn result in a trade war and be disadvantageous to both sides. There have been known to be two important ways of implementing a tariff: o An ad valorem tariff which is imposed is a fixed percentage of the value of the goods that are being imported. Sometimes these can be problematic since, when the international price of the item falls, so does the tariff, and domestic industries become more vulnerable to competition. So also, conversely when the price of the item rises on the international market so does the tariff, but in such an event, a country is often less interested in protection when the price is higher. They also could end up facing the problem of transfer pricing wherein a company declares a value for goods being traded which is later seen to differ from the market price, aimed at reducing the overall taxes that are due. o A specific tariff can be imposed - this is a tariff of a specific amount of money that does not vary with the increasing or decreasing price of the goods. In these tariffs it is difficult to decide the amount at which to set them, as they may need to be updated due to changes in the market or inflation.