Tax Base

The tax base is the total amount of income, property, or sales that a government can tax within a specific area or jurisdiction. It represents the economic value or assets that are subject to taxation, providing the foundation upon which tax rates are applied to generate revenue. For example, if a city taxes property, the tax base includes the collective value of all taxable properties there. A larger tax base generally means more potential revenue for public services, while a shrinking one might signal economic challenges. Understanding the tax base helps assess a government's ability to fund services and infrastructure.