All Muslims who live above the subsistence level must pay an annual
alms, known as
zakat. In the modern sense, this would be Islam's equivalent to US
Social Security or UK
National Insurance. This is not charity, but rather an obligation owed by the eligible Muslim to the poor of the community. The amount is calculated based on the wealth of the Muslim. There is no fixed rate stated in Quran; but the generally practiced rate is 2.5 percent. Eligibility and total payable varies; depending on the type and quantity of wealth being assessed. If the Government wishes to create a comprehensive and robust welfare state, the rate can be increased. Wealth includes savings, jewelry and land. Classic Islamic law details the tax, how it is assessed, its collection, and its distribution. Islamic law recognizes private and community property, as well as overlapping forms of entitlement for charitable purposes, known as
waqf or trusts. Under Sharia law, however, ownership of all property ultimately rests with God; while individual property rights are upheld, there is a corresponding obligation to share, particularly with those in need. The laws of contract and obligation are also formed around this egalitarian Quranic requirement, prohibiting unequal exchanges or unfair advantage in trade. On this basis, the charging of interest on loans is prohibited, as are other transactions in which risks are borne disproportionately to the potential returns between parties to a transaction. The limits on personal liability afforded by incorporation are seen as a form of usury in this sense, as is insurance. All these inequities in risk and reward between parties to a transaction, known collectively as
riba, are prohibited. For this reason, Islamic banking and financing are partnerships between customers and institutions, where risk and reward are distributed equitably. Partnerships, rather than corporations, are the key concept in collective Islamic business. Financing and investments are accomplished in this manner, as purchases and resales, with equity shifting over time between the institution and the client as payments are made or returns are recognized. Conversely, no individual is shielded from the consequences of poor judgement or bad timing. The Islamic financial and investment models have taken root in the West and begun to flourish. Classic Islamic law details the manner of contracting, the types of transactions, the assignment of liability and reward, and the responsibilities of the parties in Islamic trade. ==Dietary law==