What is advalorem?

Advalorem refers to a tax that is calculated as a percentage of the value of the item being taxed. This type of tax is commonly used on goods and services, property, and imports. Ad valorem taxes are based on the value of the taxed item at the time of assessment. They are easy to administer and are often seen as a fair and efficient way to collect revenue from taxpayers. However, they can be difficult to calculate accurately and can be disproportionately high for low-income individuals. Ad valorem taxes are used by many countries around the world, including the United States, where they are often used to fund local governments.