taxes

taxes

• a levied fee charges by the government on a product, income, or activity

  • any government income

    *benjamin franklin: “nothing is certain but death and taxes”

income taxes

• paid out by anyone who earns an income by any means

  • goes to the federal government

    • every paycheck, the government gets paid

    • those with less income pay less than those with more income (tax breaks are given)

      *9 states do not have income taxes — washington, south dakota, nebraska, wyoming, alaska, texas, florida, tennessee, new hampshire

      • have other taxes: somebody needs to get paid!

property taxes

• paid by anyone who owns property such as land, a home, or commercial real estate

  • goes to the state and local governments

    (NJ —> local gets property taxes for funding schools, police, etc)

sale taxes

• taxes on sale goods or items

  • goes to the state government

    • how state officials are paid

      (NJ’s number 1 source of revenue —> 6.625% *no taxes on clothing and baby needs*)

inheritance/estate tax

• only type of tax that can happen due to a death

  • only paid if they are left a lot of money —> even companies

    • goes to federal government (when someone dies, federal government gets money)

excise taxes

• paid when purchases are made on a specific good considered “sinful”

  • extra sales tax

    (NJ — cigarettes, gas, cell phone service plans)

    (all states — alcohol)

    • goes to the federal government (why they wanted to make marijuana illegal)

federal government gets all…

• income taxes

• excise taxes

• inheritance/estate taxes

state governments gets…

• all sales takes

• some property taxes (if no sales tax in the state)

  *depends on state

local governments get…

• some property tax

  *depends on state

tax system in america

• progressive tax system

  • takes larger proportion of income from those with high-income than those with low-income (tax-brackets)

    • we do not have a flax tax system, where the same tax rate applies to all levels of income