Taxation is a system of compulsory contributions levied by a government to fund public expenditures. Governments increase taxes to stabilize prices, stimulate production, and influence the economy. A sound tax system is fair, clear, certain, convenient, and efficient. Different types of taxes, such as income tax, value-added tax, and capital gains tax, can affect personal and corporate decisions in various ways. Tax incidence refers to who ultimately bears the burden of a tax, and taxes can be shifted through higher prices or lower costs. Tax evasion involves illegal attempts to lessen one's taxes through fraud or underreporting.