Subscribe For Free Updates!

We'll not spam mate! We promise.

Thursday, January 31, 2013

Type of taxes which Americans pay


Taxation History: - Taxes was firstly introduced in Ancient Egypt as the records we have showed that the pharaoh would collect taxes from the people of Egypt for the kingdom. Taxation also described in the Bible “when the crop comes in, give a fifth of it to Pharaoh. The other four-fifths you may keep as seed for the fields and as food for yourselves and your households and your children."
What is tax? Tax is derived from the Latin word ‘taxare’ meaning ‘to estimate’

A fee charged by a government on a product, income, or activity. If tax is levied directly on personal or corporate.

Too Short But full defines taxes on India.
"The State taxes alcohol heavily"; "Clothing is not taxed in our state”
We generally bother about our Indian taxes but I found some article elsewhere about the American taxes, how much American pays the taxes. There are 12 ways that American would be taxed. Means 12 type of taxes American pay generally.
Tax is the universal and applies to almost every country but the type of tax and the rate structure differs to every country.
Tax is the main source of revenue of every country which she can distribute in different type of expenses like defense and public health.
There is also a saying that ‘nothing is certain but death and taxes’. So taxes are certain and there is the list of 12 taxes which American need to pay.
1) Income Taxes
Income tax is the main tax in the United States as most of the Americans divert to income tax while hearing the word tax. The reason is simple. American pays as much as 35% of their income as income tax which is very heavy. So income tax is the main tax in America.
2)Business Taxes

Also known as corporate taxes, these are direct taxes levied on the profits of businesses. Expenses that are deemed necessary to the business can usually be deducted to lower the amount of profits subject to taxation.
3) Payroll Taxes

Payroll taxes are the taxes which employees pay from their wages. The employer must cut the tax amount to their wages and pay to the government of America. Some payroll taxes include federal withholdings, disability insurance, Medicare, and other state withholdings.
4)Capital Gains Taxes
Capital gains are the income generated from sale of an assets or stock. Capital gains are generated from the sale price deducting to the purchase price of any stock or property. In the United States a tax is levied on all income generated from a taxpayer’s capital gains. Alternatively, if a taxpayer suffers from capital losses they can deduct the full loss amounts. The most common capital gains are created from the sale of stocks, bonds, and property.
5) Inheritance Taxes:-The inheritance tax is the tax which is also known as death tax. Any property transferred due to death of a taxpayer is inheritance tax. However, when they are left to a spouse or a charity, the tax usually does not apply.
6) Consumption tax:-Consumption taxes –consumption tax are also known as sales tax. Sales tax levied on the point of purchase to different goods. The rate of consumption tax are different to different goods and the location wise as due to large area the state and local authority charge sales tax at different level.
7) Property Taxes:-Property taxes are the taxes which are imposed on the assets and properties for the ownership. These taxes levied on different types of assets like real estate as well as some personal properties.
8) Excise Taxes:-Excise taxes are the taxes which are taxed on product cost. The same as in India excise taxes are on manufacturing units and the tax rate are high. Excise taxes are high on some products as well as some products are free from excise whereas some products have some exemption limit in America.

9) Gift Taxes:-A gift tax is the tax which is taxed of transfer the property from one hand to another. Gift is considered to some value products to be transferred with no cost or less than actual cost. There is gift tax in America but a few exemptions thereon.

10) Retirement Taxes:-Retirement tax is those which are levied on taxpayer retirement in America.
11) Tariffs:-In India it is also known as custom duty. Tariffs are the tax which is levied on import and export of the goods. In America the import duty is high whereas export duty is low to encourage domestic manufactures and to increase the prices of foreign goods.
12) Tolls:-Tolls are the fees or the tax which is charged when some vehicle cross specific boundary or some bridge which is very costly in view of manufacturing. Every time the vehicle crosses the toll it needs to pay a specific amount of money as the fees of toll or tax.