2.02 I can understand types of taxs

By: Ashley Lusk

Excise tax

Taxes collected from the seller or retailer and as such often remain "hidden" in the price of a product or service, rather than being listed separately. This tax is charged on gas, hotel rooms, airline tickets, cigarettes, and alcohol. It pays for expenses of state and local government. This tax is paid by anyone who purchases certain items that are charged an excise tax. This tax can vary by location.


Income tax

A tax on earned and unearned income. The Income tax is divided into federal income tax and state income tax. This tax can pay for operations of the federal government and state highways, and state government.


Payroll tax

A tax on earned income that supports the Social Security and Medicare programs. This tax provides for people with disabilities, or children who have lost a parent, a parent with a child who lost a spouse. It also helps pay for health care for senior citizens. This tax is paid by individuals who earn income from working for pay.


Property tax

A tax on property, such as land, buildings (including homes), and automobiles. This tax pays for schools, and expenses of state and local government. This tax is paid by property owners.


Sales tax

A tax on purchased goods and services. This tax pays for expenses of state and local governments. This tax is paid by anyone who can purchases an item charged with sales tax. The more you buy the more you have to pay.