Tax exemption
From Wikicpa
A tax exemption is an exemption to the tax law of a state or nation in which part of the taxes that would normally be collected from an individual or an organization are instead foregone.
Normally a tax exemption is provided to an individual or tax-exempt organization which falls within a protected class of some kind. Tax exemptions are usually meant to either reduce the tax burden from a particular segment of society in the interests of fairness or to promote some type of economic activity through reducing the tax burden on those organizations or individuals who are involved in that activity.
Typical tax exemption criteria used are age of the individual paying tax, public service which the individual has performed (war veterans), ownership of types of property (homeowners), geographic location of property, income level of the individual paying the tax, or the value of the property being taxed.
In the United States the classic property tax exemption provided homeowners is the homestead exemption. There are many others such as exemptions on income tax (exemptions for dependents or people such as children who are financially dependent on the tax payer).
Tax exemptions have a glorious history as being tools of social and economic change with unintended consequences.
