What it is:
A direct tax is any tax levied on companies or individuals that cannot be transferred to another party. It is the opposite of indirect tax.
How it works/Example:
Direct taxes affect individuals and companies to the amountn of the tax that cannot be eliminated by transferring to another party. Personal, corporate and property taxes are examples of direct taxes.
Why it matters:
Individuals and entities affected by direct taxes should stay informed about how much they should be prepared to pay, and if these changes might affect business decisions.