What type of taxes are imposed on goods and services and not directly on income?

The correct answer identifies indirect taxes, which are levied on goods and services rather than directly on an individual’s income. These taxes are typically included in the price of products and are collected by sellers when goods or services are purchased. When consumers buy items, they often pay these taxes without seeing the separate cost, making them an integral part of retail pricing.

Indirect taxes serve several purposes in an economy, such as generating revenue for the government, influencing consumer behavior, and addressing externalities associated with the consumption of certain goods. For example, taxes on cigarettes or alcohol can discourage excessive consumption while also increasing government funds.

The other types of taxes mentioned do not fit this description. Direct taxes, for instance, are applied directly to income or profits, such as income tax. Property taxes are levied on real estate; they are not associated with transactions on goods and services. Tariffs are a specific type of indirect tax applied to imported goods, but they only affect international trade rather than the broader category of consumer transactions.