People who dispose of their assets are expected to pay ______________

Answer Details

When people dispose of their assets, such as by selling them, they may be required to pay a tax on any profit they made from the sale. This tax is known as a capital gains tax. The capital gains tax is a tax on the increase in value of an asset between the time it was acquired and the time it was disposed of. For example, if someone bought a piece of real estate for $100,000 and sold it for $150,000, they would have a capital gain of $50,000. The capital gains tax would be calculated based on that $50,000 gain. The capital gains tax is not a tax on the total amount received from the sale of the asset, but only on the profit made from the sale. This is different from a sales tax or an expenditure tax, which are taxes on the total amount spent on a good or service. A value added tax is a type of sales tax that is applied at each stage of production, from the raw materials to the final product, based on the value added at each stage. This tax is not directly related to the sale of an asset. Therefore, the correct answer is "capital gains tax."