Tax base

A tax base is the assessed amount of an entity's assets or income that are subject to taxation. The concept is used to derive the tax income of a government entity. For example, if the tax base of a region is derived from property values, an upswing in real estate prices will result in a corresponding increase in property taxes for the governing entity. When a region's tax base fluctuates (as may occur when the area transitions from a growth phase to a recession), the outcome will be corresponding changes in the tax receipts of the applicable government.