The different taxes we pay are a reality of life that cannot be ignored. Here are 5 types of taxes by which Americans pay:
- Sales Tax
These are levied on goods and services that are purchased. This type of tax varies from state to state. It is calculated as a percentage of the price paid. It is regressive in nature, which means that low-income people have to use a greater proportion of their earning to pay this tax compared to high-income people.
- Excise taxes
The excise tax is a kind of tax which is similar to sales tax. The only difference is that it is levied on the purchase of specific goods usually the unhealthy items. State applies these taxes on the purchase of gas, cigarettes, beer and liquor. They are mostly levied on “sin products”, the aim of the state is to generate income and deter wrong behavior.
- Income taxes
It is a tax levied on the income you earn. This is charged at all three levels; federal, state, and local. Income tax levied at federal level depends on upon marital status and the amount of income earned. States have different criteria. Some states such as Florida do not charge income tax at all while others apply different tax rates depending on income.
- Payroll taxes
Employees and employers have to pay social security tax on their income is also known as payroll tax.
- Property taxes
These are levied by local level authorities on the property owned by the US citizen. They are levied to fund the local services.
My Tax Help MD provides the best IRS back tax help and tax settlement services and make the life of its clients easy and relaxed. Having a team of professional tax consultants, we provide diverse IRS tax debt relief service. You can tell us your tax problems and we will come up with the best possible solutions for them.