Thursday, May 10, 2007

Taxes- How Does the Government Get Money?

The average American worker pays about 1/4 of their income to taxes. Some people pay taxes that others don't based on annual income amongst other factors. Medicare, social security and sales tax are some of the common taxes all Americans pay. Federal, state, and local taxes are paid based on how much the government needs.

Federal Tax:
Income tax- collected from rent, salaries, wages, and interest on bank accounts

Estate tax- collected from the deceased estate

Excise tax- taxes paid for alcohol, gas and tobacco

Payroll tax- only collected from salaries and wages

Gift tax- collected during the property of property


State Tax:
Inhereitance tax- collected from a person after they have inhereted from the deceased

Estate tax- collected from the deceased estate

Excise tax- taxes paid for alcohol, gas and tobacco


City/Local Tax:
Property tax- collected from financial assets including stocks, houses and cars

Excise tax- taxes paid for alcohol, gas and tobacco


THATS ALL FOLKS...

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