12-29-2016, 07:28 AM
The distinction between what is a direct tax or what is an indirect tax is rather simple. When the subject of taxation is also its tangible source it is being directly taxed; however, when the product (e.g., its fruit or realization) of the subject’s source is being taxed it is being taxed indirectly. That is to mean a tax upon a blooming apple tree is direct; however, a tax upon its falling apples is an indirect tax.
Your example is not very well thought. As you owe the land tax regardless if you have gains or losses within your business activities and regardless of how many charges you took in. Further still, you (will likely) owe additional taxes on that extra money you are charging to cover your operating costs, including your land taxes. The same does not apply to indirect income or corporate taxes—ergo, if nobody is buying your crap, you owe no tax.
Well, really you have the point of view of two interested parties, with a tax that is deemed to be due, so naturally the one paying will shout it to be a direct tax, while the other will label it an indirect tax upon them as they are no longer receiving the whole of the gifted/bequeathed property. But of course somebody has to pay the tax, and both parties ultimately realize a loss because of it. So estate and gift taxes are really about personal perspective, but have historically been known as excise taxes—just as historically, taxes upon laborers, including their wages, have been known as capitation or personal taxes.