Taxes- How Does The Government Spend Money?

Type of Tax Specific Tax: How are they collected?
Federal Taxes • Payroll Tax: collected from wages and salaries only
• Income Tax: collected from wages, salaries, rents, interest on bank accounts and dividends
• Corporate Income Tax: collected from a corporations net income
• Excise Tax: collected from the sales of items like gas, alcoholic beverages and tobacco
• Estate Tax: collected from a dead person’s estate
• Gift Tax: collected during the transfer of property between people

State Tax • General State Tax: collected from general sales
• Excise Tax: collected from the sales of items like gas, alcoholic beverages and tobacco
• Estate Tax: collected from a dead person’s estate
• Inheritance Tax: collected from a person after they inherit something from a dead person

City/Local Taxes • General Sales Tax: collected from general sales
• Excise Tax: collected from the sales of items like gas, alcoholic beverages and tobacco
• Property Tax: collected from assets like stocks, bonds, houses, cars and artwork

Miscellaneous Taxes • Pollution Tax: collected from companies that produce air, water, oil or water pollution.