What type of personal property is generally exempt from tax?

Items essential for personal living, such as clothing, household goods, and basic furniture, are generally exempt from tax to relieve the burden on individuals and families. Tax policies often recognize the necessity of such items for daily life and well-being, leading to protections against taxation for these essential personal belongings. The rationale is to support citizens in maintaining a reasonable standard of living without being financially penalized for acquiring basic necessities.

In contrast, equipment used for business purposes and farm machinery typically do not qualify for tax exemptions, as these are considered to be assets that generate income or support commercial activities. Luxury items also do not usually fall under tax exemptions; instead, they are often subject to higher tax rates as a means of taxation on non-essential goods that are considered discretionary purchases.