The reason citizens pay income tax is so that the government can have the funds to build libraries, roads, and fire and police stations. Income tax is also used for welfare and social security programs. In addition to income taxes, there are also sales taxes, corporate taxes and property taxes.Continue Reading
The two types of taxes that a taxpayer pays include federal tax and state tax. Federal income tax is used by the U.S government for the overall improvement of the country. Congress decides on a tax rate as well as how the federal income tax money is utilized before the Internal Revenue Service gathers the necessary taxes. State income taxes are used by individual States, but there are some that don't charge income taxes.
Any citizens who receive any type of income have to pay income taxes. Income can be gained from a salary, capital gains, gambling, operating a small business or investing in the stock market.
In 2011, it was estimated that almost 50 percent of the U.S. budget, which was approximately $1.1 trillion dollars, was made up of income taxes. To make sure they aren't paying too much in income tax, individuals should consult with an experienced and trusted tax professional or accountant.Learn more about Taxes