Public law is important because of the unequal relationship between the government and the public. The government is the only body that can make decisions on the rights of individuals and they must act within the law. A citizen can ask for judicial review if they are unhappy with a decision of an authoritative body.

Public law is the part of law that governs relations between legal persons and a government, between different institutions within a state, between different branches of governments, and relationships between persons that are of direct concern to society.

The type of law that governs the relationship between government and individuals is called public law.

The law of torts is part of private law, of which other parts are the law of property, the law of contract, and so on. Private law is contrasted with public law. Public law is concerned with the institutions and powers of government and with relations and interactions between government and citizen.

These are: (1) the belief that taxes should be based on the individual’s ability to pay, known as the ability-to-pay principle, and (2) the benefit principle, the idea that there should be some equivalence between what the individual pays and the benefits he subsequently receives from governmental activities.

A direct tax is when the taxpayer pays directly to the government. For example, income taxes and property taxes are direct taxes that an individual must pay and cannot pass responsibility to another party to pay them.

Income taxes are imposed on the income earned by a person or firm; property taxes are imposed on assets; sales taxes are imposed on the value of goods sold; and excise taxes are imposed on specific goods or services. Figure 15.1 shows the major types of taxes financing all levels of government in the United States.