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Taxation Information
What Is Taxation?
Taxation in the United States is a complex system which may
involve payments to at least four different levels of government:
* Local government, possibly including one or more of municipal, township,
district and county governments.
* Regional entities such as school, utility and transit
districts.
* State government.
* Federal government.
The federal government is now financed primarily by personal and corporate
income taxes. While it was originally funded via tariffs upon imported goods,
tariffs now represent only a minor portion of federal income. There are also
non-tax fees to recompense agencies for services or to fill specific trust funds
such as the fee placed upon airline tickets for airport expansion and air
traffic control. Often the receipts intended to be placed "trust" funds are used
for other purposes, with the government posting an IOU ('I owe you') in the form
of a federal bond or other accounting instrument, then spending the money on
unrelated current expenditures.
The federal government collects several specific taxes in addition to the
general income tax. Social Security and Medicare are large social support
programs which are funded by taxes on personal earned income. Estate taxes are
taxes on inheritance. Net long-term capital gains, including certain types of
qualified dividend income, are taxed preferentially.
Federal excise taxes are applied to specific items such as motor fuels, tires,
telephone usage, tobacco products, and alcoholic beverages. Excise taxes are
often, but not always, allocated to special funds related to the object or
activity taxed.
Local government is typically financed by value-based property taxes, mainly on
real estate. Additional taxes may be in the form of fixed sales taxes. Local
government fees such as building permit fees may reflect the added capital cost
and operating costs of services such as schools and parks. Local governments may
also collect fines (parking and traffic tickets), income tax, gross receipts or
gross payroll tax, or a portion of sales taxes (such as meal taxes) collected by
the state. In California, seeds, bulbs, starter plants and trees obtained from a
garden center are taxed if adjudged for decorative purposes while plants for
food production are untaxed, as is food in California.
For more free legal information on Tax Laws, please use the
links below:
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