Taxes pay for so many services that we sometimes don’t really stop to think about but benefit greatly from them.
Income tax is a progressive tax. Meaning, the tax rate increases as the amount subject to taxation increases. The proceeds from income tax are used for the Federal budget.
Sales taxes – can be imposed at any level of government, but the largest percentage commonly is at the state level. This tax goes towards the State’s budget and will vary from state to state. Income tax – is imposed at the federal level as well as the state level. Not all states have a state tax, we in Wyoming are lucky to not have this tax.
Real estate taxes – are imposed by local government in order to pay for schools, police/fire services, hospitals, garbage disposal, sewage/sanitation, road maintenance, parks, and libraries.
There are of course other types of taxes such as the Payroll (FICA), Capital Gains, Corporate, Estate, Gift, and Excise taxes. These taxes are used for the government’s budget, with the exception of the Payroll Tax which goes to fund Social Security and Medicare.
We all have to pay taxes and we all benefit from them, even though we might not think that way at the moment when we see them deducted from our paychecks or on that fateful day April 15th.