Taxes Explained

America is a representative Republic with a federal government and autonomous municipal, state and local governments. There are many kinds of taxes imposed on US citizens at every level of the government. Some of these taxes include income, payroll, property, sales, imports, estates and gifts, as well as various fees. Tax revenue from all of these accounts for almost 25% of the US Gross Domestic Product (GDP). 

Income is subject to tax at all levels. The federal tax rates vary from 10% to 39.6% of the money you make. State and local tax rates vary widely by state, from 0% in states like Texas, Florida and Nevada, to 13.30%. Usuallly, state taxes are treated as a deductible expense from your federal income tax. Unfortunately for some wealthy California tax-payers, they will take home less than 50% of their income starting in 2013 due to the tax rates imposed there.

The United States is the only country in the world that makes its non-resident citizens pay taxes on their worldwide income, just like if you lived here. The Supreme Court upheld the constitutionality of that tax in 1924 in a case called Cook vs Tait. 

So you can see why Tea Party people are not very happy when it comes to all these taxes. This doesn’t seem right to many people! The worst part is that all this income for the government leads to massive government waste.

Remember, our country revolted against England’s rule because of all the unfair taxation. What would those folks think about all the taxes we pay now? Do you think they would be ready to revolt again?