Search results
Results From The WOW.Com Content Network
An indirect tax is collected by an intermediary (such as a retail store) from the person (such as the consumer) who pays the tax included in the price of a purchased good. The intermediary later files a tax return and forwards the tax proceeds to government with the return. In this sense, the term indirect tax is contrasted with a direct tax ...
Most business expenses reduce taxable income, though limits apply to a few expenses. Individuals are permitted to reduce taxable income by personal allowances and certain non-business expenses, including home mortgage interest, state and local taxes, charitable contributions, and medical and certain other expenses incurred above certain percentages of income.
The income tax is just one example of a direct tax, but all direct taxes share the same basic framework — people, businesses, and other organizations pay them directly to the government.
The difference between a true flat tax and a marginally flat tax can be reconciled by recognizing that the latter simply excludes certain types of income from being defined as taxable income; hence, both kinds of tax are flat on taxable income.
States collect income tax to pay for services such as education, medical care and public infrastructure. A large part of each state's revenue comes from personal income tax as well as sales tax and...
But there are both pros and cons to living in a state with certain tax advantages.
The United States federal government and most state governments impose an income tax. They are determined by applying a tax rate, which may increase as income increases, to taxable income, which is the total income less allowable deductions. Income is broadly defined. Individuals and corporations are directly taxable, and estates and trusts may be taxable on undistributed income. Partnerships ...
The differences between the two are fairly significant, and choosing one over the other is the subject of endless debate among economists, politicians and taxpayers alike.