Tax is money that is imposed by a certain government, or state to an individual. Taxes are collected to these people so that there is a fund that will help on the projects of the government to its citizen. The collection of tax is not voluntary, but is enforced so that the projects by the government will be made. Where taxes came from There are many categories where the federal government gets the taxes that will be used on the programs of the country. One category is the Capital gains tax. Capital gain tax is collected on the profit of selling capital assets. This can be accounted as the income tax in selling the capital asset.
Another is the taxes coming from corporations and is termed as corporation taxes. The tax is charged on the income of the company. It is determine when the gross income is subtracted to the total expenses and multiplying the difference to the tax rate. Excises are another form of tax that is collected from different companies. It is different from other taxes in such a way that the main concern in the collection of the taxes is the quantity of the product and not the quality. Examples of this tax are the alcohol, and pornography tax. High amount is being collected from this business because on the structure of the business.
The tax collected from these businesses is more commonly known as sin taxes. The most common form of tax is the income tax. The tax that is collected from employees, corporations and other legal identities is what income tax makes up. 1(Development) Purposes of Tax In the United States, the federal government allocates its tax collection to different programs and departments of the government institutes. To further understand where the money collected from each household goes, the breakdown of expenses must be presented. In 2004, the federal government of United States estimated a total of $21, 671 for each household.
The breakdown of the proposed funds for each household starts from the Social security and Medicare programs. It has a total of $ 7,165. The tax coming from the citizen of the country allocates about 15% of the total tax collected in these programs. This is one of the most priorities of the government, the social security as well the health security of its citizen. The money will be used on programs pertaining to the security of a people on the society and the medical benefits for a sick person. The second program where the tax collected is where going is on the defense department. It has a $4,240 budget from each tax of household.
There was a going debate because on the amount of funds that was allocated in this program. In 1990, a budget cut on this program was made but the 911 attacks trigger the increase in the defense budget. The third program that utilizes the money of the government is the low-income programs. A total of $ 3,479 was estimated on this program. The money is utilized mainly on the programs that provide medical health care services for poor families. Other low-income programs are; food stamps, housing and child care subsidies, Supplemental Security Income (SSI), Temporary Assistance for Needy Families (TANF) and low income tax credits.