In the United States, the history of taxes goes far back in time. During the Civil War, there was a tax on income for a short period of time. In the 1890s, the tax was ruled unconstitutional by the Supreme Court. In 1913, the 16th Amendment was passed which gave the United States the power to tax personal income.
Congress imposed taxes to help raise money to fight wars.Before, the government relied on excise taxes on liquor and tobacco for its revenue.These taxes benefited American manufacturers by keeping prices high for foreign-made goods. During the Great Depression in the 1930s, the government also many income and social security programs. The federal income tax began as a tax on only the wealthy in the 1960s. Later, this tax included almost all families, not just the wealthy.
Personal Income Tax makes up more than half of the Federal Governments revenue.
Individuals are taxed on their earnings ever since July 31, 1969. This is where most of the Governments money comes from. Personal income tax produces about five times as much revenue as the corporate income tax. But, not all income is taxed in the same way. Owning stock in a corporation or collecting interest from a savings account is handled in a special way.
Also, there are many types of exemptions and tax-deferred savings plans available.
For the fiscal year 1998, total individual collection in Illinois was $7,254,646,661. This was a 10.8% increase from the previous year. In 1989, total individual collections were $3,729,530,665.
The initial income tax rate in individuals is now at 3% which was made permanent in 1993.
When you purchase goods or services, you have to pay a tax. There are two different kinds of these taxes: the vendor tax and the consumer tax. The vendor tax taxes the person doing the business.
The tax is based upon the amount of goods sold. The consumer tax taxes the actual retail sale. The vendor at a store collects the tax from the buyer and sends that tax money to the state. Sales tax is an established rate. A use tax is very similar to sales tax, but is imposed on storage, use, or purchase of personal property which is not taxed by the sales tax.
The total Illinois sales tax collected in 1998 was $5,577,486,542. This was a 4.9% increase from the 1997. The total number of registered tax payers was 244,199.
Property taxes usually helps to pay for public services such as public schools, police protection, and sanitation. Each state has different property taxes. The amount of tax is figured by the total value of the property or on a certain percentage the propertys value.
Federal income tax is based on peoples ability to pay. There are itemized deductions such as high medical bills, mortgage interest payments, or other allowable expenses which reduces your taxable income. Also, there are exemptions which can reduce your taxes.
People who make more, pay more. Federal income tax is considered
a progressive tax. The Internal Revenue Service expects all tax payers to abide by the laws.
All gasoline and diesel fuel that is purchased is taxed in cents-per-gallon.
These tax rates vary from each state. Volunteer fire units and governmental units are exempt from paying fuel taxes. Also, gasoline taxes are refunded to farmer for the gasoline used in their farming operations. The motor fuel tax makes up a total of 3.
90% collected compared to the 23.46% federal taxes collected, 18.01% sales tax, 25.52% in income taxes, and lottery is 2.46%. Total collections in 1998 from automobile rental usage was $26,287,733 which increased by 4.
4% from 1997.
Inheritance tax is imposed on the transfer of property after the owners death. The beneficiary of the property must pay the tax. This is determined by a flat rate method or the graduated rate method. Most states impose this tax.
Our economy is based on capitalism, or a free market. We can decide on how to invest or spend our money. This free market does not produce all services needed by society. Taxes are collected to pay for these services. Some examples are local or state police protection and a national defense system. Also, there are user fees which are collected by toll booths or entrance fees to national parks.
In conclusion, there are many kinds of taxes in the United States. There is tax on income, consumption, property and wealth.Also, the federal income tax taxes people on their ability to pay. Along with this there is exemptions and deductions.
Furthermore, inheritances, fuel, and corporations are also taxed.Some of the money collected from taxes funds public schools, state governments, health and welfare benefits. Taxes also pay for the construction of our highways and hospitals. As you can see, some of our income goes somewhere other than our bank accounts.
www.revenue.state.il.us/publications/annualreport/1998/economicover.htm
www.revenue.state.il.us/taxinformation/other/property.html
www.revenue.state.il.us/taxinformation/excise/gas.html
www.revenue.state.il.us/taxinformation/income/individual.html
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