Every country has taxes on the people working in that countries pay this is money that is known as income tax and pays the people that work for that governments wages but also is used by the government to improve and maintain the towns services such as waste disposal,
road conditions, street lighting etc. However, this is not the only tax that people have to pay for example in the USA there are many different taxes for people in different situations. Some of these taxes for the USA are;
- Income tax - People from most countries will understand this term as it is taken from most working people wages in almost every country. It is basically an amount of money that the government takes directly from your wages. So this amount taken when ever you are paid goes directly to the governments funding.
- Federal income tax - This is another amount taken from peoples wages and as with the income tax the more you earn the more you will have to pay in federal tax. The way how much you pay is determined is dependant on your wage if you are in a lower bracket of earnings you will probably only pay around 10%, however, if you are in a higher bracket then you can pay up to the regions of around
35% just on the federal tax alone. The money taken is used to build up government services such as defence and education. - Medicare tax - These taxes are also taken out of your wages but only at a rate of around 1.5% and is used to aid the elderly (aged 65 and over) in paying for their medical bills if they are unable to pay them fully them selves.
- Social security tax - This is with held from your wages automatically at a rate of around 6% and the money raised from this tax is used to do exactly what the name says it improves social security. This means they aid disabled people and also the retired in situations where they may be unable to pay for the cost of living alone.
There are then different kinds of taxes that are put on top of the price of products and services, some examples of these taxes are;
Property tax - this is an amount of tax that your government will charge you and the amount you have to pay is determined by how much they evaluate your residence to be worth. The more your property is valued at the more property tax you will be expected to pay.- Excise taxes - These are charged on top of products such as alcohol, tobacco and also gambling, it is thought if they have raised prices on these products it may discourage people from buying them excessively.
There are many different kinds of tax for various countries and the governments from the different countries decide to spend these taxes in different ways.