Tax Basics
a government levy (tax) imposed on individuals/taxpayers
What is a tax?
A tax on prepared goods
What is a sales tax
A 15.3% tax on a employee and employer on earned income
What is a payroll tax?
Money not earned through wages or bonuses is subject to this tax
What is a capital gains tax?
A tax on your earned income that your employer is liable for
What is a Federal Income Tax?
Taxes can be used to pay armed forces and buy war munitions
What is the purpose of taxes in the military?
Goods such as groceries/medicine is not subject to a Sales Tax
What items are not subject to the Sales tax?
You pay exactly half of this tax, (7.65%), your employer pays the other half
What is the amount of money a individual pays for the payroll tax?
The value of this tax varies on how long you hold a asset (for example, stocks, bonds, rare minerals)
How does the rate of a capital gains tax change?
Depending on how much you make this tax has you pay 10% to 37% of your earned income
What is the rate of the Federal Income Tax?
Taxes can be used to fund government projects and pay for the salary of numerous government employees
What is the purpose of Taxes in the Government
The rate of this tax is 8.875% in New York
What is the rate of the Sales Tax?
Funds federal programs such as Social Security and Medicare
What is the payroll tax used to pay for?
Another tax that is used to pay for public services and government projects.
Where does the money earned from the Capital Gains tax go?
Your employer is responsible for this tax
Who is responsible for a Federal Income Tax?
Taxes can incentivize/disincentivize consumers to spend more money
What is the purpose of taxes in the economy?
The money from this tax goes to state/local governments
Where does the money from a sales tax go to?
Bonuses are subject to a payroll tax
What other source of income other than my wages gets affected by a payroll tax?
Stocks, gold, and government bonds are subject to this tax
What are some examples of assets subject to a capital gains tax?
This tax has a higher rate the higher a person's earned income is
How is a Federal Income Tax a form of income tax?
Taxes that are dependent on the amount of money you earn
What is income tax?
Used to discourage the purchase of certain goods such as alcohol, cigarettes, etc.
What is a purpose of the Sales Tax?
Self employment means that you pay the entire 15.3% of the payroll tax
What is a special case of the payroll tax?
Forces people with inheritances or disproportionate amounts of accumulated wealth to pay taxes
What is one purpose of a Capital Gains Tax?
My employer took away some of my paycheck money :(
What does your employer do with your paycheck after paying for the Federal Income tax?