Taxation Across All 3 Levels of Government

Federal Taxes

The federal government collects a variety of taxes, including:

• Individual income tax: This is the largest source of revenue for the federal government. It is calculated based on a taxpayer’s taxable income, which is their total income minus certain deductions and exemptions.
• Corporate income tax: This tax is levied on the profits of corporations. It is calculated based on the corporation’s net income, which is its total income minus certain deductions and exemptions.
• Payroll taxes: These taxes are paid by both employees and employers to fund Social Security and Medicare. They are calculated based on a taxpayer’s wages and salaries.
• Excise taxes: These taxes are levied on specific goods and services, such as alcohol, tobacco, and gasoline. They are calculated based on the quantity of the good or service that is purchased.

State Taxes

State governments also collect a variety of taxes, including:

• Individual income tax: Most states have their own individual income tax, which is calculated in a similar way to the federal individual income tax.
• Sales tax: This tax is levied on the purchase of goods and services. It is calculated based on the purchase price of the good or service.
• Property tax: This tax is levied on the ownership of real estate. It is calculated based on the assessed value of the property.

Local Taxes

Local governments, such as cities and counties, also collect a variety of taxes, including:

• Property tax: Local governments also levy property taxes. However, the rates and assessment methods vary from jurisdiction to jurisdiction.
• Sales tax: Some local governments also levy sales taxes. However, the rates vary from jurisdiction to jurisdiction.
• Other taxes: Local governments may also collect other taxes, such as income taxes, hotel taxes, and car rental taxes.

Taxation in My Local Community and State

In my local community and state, the following taxes are levied:

• Federal individual income tax: The federal individual income tax rates are as follows:

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• State individual income tax: The state individual income tax rates are as follows:

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• Sales tax: The state sales tax rate is 6%.
• Property tax: The property tax rate varies from jurisdiction to jurisdiction. However, the average property tax rate in my state is 1.2%.

How Taxes are Collected and Paid for by Taxpayers

Federal taxes are collected by the Internal Revenue Service (IRS). State taxes are collected by the state revenue department. Local taxes are collected by the local government.

Taxpayers can pay their taxes in a variety of ways, including:

• Direct pay: Taxpayers can pay their taxes directly to the IRS, state revenue department, or local government by mail, online, or by phone.
• Payroll deduction: Employers can withhold a taxpayer’s federal and state income taxes from their paycheck.
• Estimated taxes: Self-employed taxpayers and taxpayers who do not have enough income tax withheld from their paycheck must make estimated tax payments throughout the year.

How Taxes are Utilized to Build Social Benefit Programs

Taxes are used to fund a variety of social benefit programs, including SNAP. SNAP is a federal program that provides food assistance to low-income individuals and families. SNAP benefits are funded by federal taxes.

To be eligible for SNAP, households must meet certain income and asset requirements. Households that are eligible for SNAP receive a monthly Electronic Benefit Transfer (EBT) card that can be used to purchase food at