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Abstract
The generation of income, and the taxation of such income, is a keystone element in the study and practice of personal finance. It goes almost without saying, the laws governing the taxation of income can be complex. Research suggests that income is often broadly defined and the taxation of income varies from country to country and taxing authority to taxing authority. In this chapter, we discuss components of income and types of taxes using examples from the United States as well as other taxing authorities. The chapter also provides a discussion of income inequality, as well as the use of governmental transfers and taxes as a means to reduce inequality.