This chapter aims to document the basic economic principles and properties of taxation so that the reader can relate principles to the various taxes. A tax structure should be based on a set of principles and properties that clearly establishes the philosophical basis of the tax structure, yet the tax structure must accept the limitations imposed by the national, state, or local economy on any method of taxation. The politics of taxation leads to imposing taxes on businesses and not on people, but the economics of taxation suggests that in the end people pay the taxes anyway. State sales tax exemptions are widespread–treating spending differently with respect to state and local sales taxation. State and local governments, on the other hand, make use of the sales tax, the property tax, and the personal income tax plus a variety of other taxes such as severance taxes, gasoline taxes, taxes on alcoholic beverages, and gambling activities, and so on.