by Maxwell Carney
We all pay taxes, that’s for sure. It can come from the money we earn to the things we buy. But of course, it’s not that simple (if they were simple, this essay wouldn't exist). Although this essay doesn’t contain all types of taxes, it does cover some you might not know about! There are plenty of other categories of taxes that citizens should know about; it’s better to know, than not to know.
The first type of tax is sales tax. This one is fairly common, almost everyone takes part in it. This tax is on things purchased. This tax is indirectly paid by consumers. This means that the businesses are the ones actually responsible for giving money to the government, the customers don’t need to take this tax into account when tax season comes around.
The second is sin tax. These taxes are levied on things such as tobacco products and alcohol products. These taxes are meant for discouraging citizens from using harmful products, giving a higher financial burden. These can be easily avoided by not purchasing these products.
The third expense is travel tax. This can take different forms, such as car rentals and lodging. This tax also varies from state to state regarding how much is taxed (this is true for almost all taxes, but this is different), specific dollar amount, or percentage. So next time when taking a vacation, make sure to take into account travel tax. Although this tax can be very small, any amount of money should be kept track of.
The fourth tax is capital gains tax. This is levied for when someone gains cash from an investment. The amount depends on the tax bracket of the investor and the length of time the cash was invested for. When thinking about this tax, think stocks and bonds.
The fifth tax is inheritance tax (or death tax). Yes, the government can tax the dead, but it’s good to know how much. On the bright side, the deceased usually have a will to give the cash/property to, though it’s on the ones who get the inheritance to calculate how much they need to pay off the tax.
The sixth, and arguably most known, is income tax. This comes directly out of your gross income. The amount depends on income amount, or tax brackets (of which there are seven). Once you receive your paycheck, the gross income will be more the net income, due to expenses. Income tax isn't the only expense taken out of the paycheck, such as money for a 401k, so not all expenses are non beneficial to the paycheck receiver.
This may not be a complete list, but a good list to help you understand that taxes are not simple. There are plenty of different types and amounts, but there is one important message to take away: pay taxes. It’s important to know what taxes to pay so the IRS doesn’t get more and more involved. tax.findlaw.com states: “If you’re found guilty of tax evasion, you can go to federal prison for up to five years.” So it’s best to know what taxes to pay, rather than end up in prison.
Work Cited
Loudenback, Tanza. “Here's How to Find How What Tax Bracket You're in for 2020.” , Business Insider, 28 Sept. 2020, www.businessinsider.com/personal-finance/what-tax-bracket-am-i-in-federal-income-tax?op=1.
Taggart, Michael. “Types of Taxes We Pay in the US [INFOGRAPHIC].” , 25 July 2019, help.taxreliefcenter.org/different-types-taxes-usa/#sin.
“Tax Evasion Penalties and Other Consequences.” , 23 Feb. 2018, tax.findlaw.com/tax-problems-audits/tax-evasion-penalties-and-other-consequences.html.
i never knew taxes could be this complicated just thought you pay them to the government on a certain day and if they take to much they give you money and vis versa. but clearly that is not how it works that for your insight on on the differnet types of taxes i never knew there was a death tax thats a little crazy like his old family is stuck with all that money ? well however its just proves to do it eariler and pay attention to your government taxation
ReplyDeleteThis blog was very well detailed, as I learned many new information of types of taxes. I didn't know any of these types of taxes, until now as I could 100% benefit from looking at this in the future of what they mean if I forget.
ReplyDeleteI think this blog post is very helpful for some people and many of us in high school. As we transition into the adult world and get out first jobs it is important to understand where our money is going. I wish would would have added something about what percent of the federal governments taxes come from each type of tax or if it is only state tax.
ReplyDeleteI loved how clear and concise your blog was! Before reading this, I knew about income and sales tax, but other than that I was unaware of the other different ways you were able to get taxed, like death tax. With all these different taxes, I wonder which ones cost you the most and which ones cost you the least, along with the reasonings behind them. I definitely learned some new things in your blog that I will keep in mind for the future. Great job!
ReplyDeleteAfter reading this article I'd definitely say that I'd never would've known that there were a variety of different taxes. In my opinion, it's interesting a tax called the sin tax. When you think about it, it kind of sounds scary because of the word "sin," but did you know that sin taxes contributed just 3.8% of total state revenue. With that being said other states tend to rely on sin taxes much more than that. I'd definitely say that sin taxes has its pros and cons. You did a great job on explaining the differences between each taxes. Now, to wrap up a question for you is, in the graph is it good to have a high percentage rate? Is it good if it's a low percentage rate?
ReplyDeleteThis just reminds me of just how much i don't know beyond the high school world. I don't even know what taxes are and i just found out there's more types of taxes crazy. Thanks for the post.
ReplyDeleteReading this blog really informed me about the different types of taxes. Before reading this I didn't know that you could tax the dead. I thought that they would just pass on the assets but now I know.
ReplyDeleteI've only ever filed taxes once (didn't get much money back of course) so I don't know much about taxes or even what the different types of taxes are. It's very helpful that you included some of the different types of taxes, what each one is and what each one is for. The type of tax that really interests me is sin tax. I had no idea that this was an actual thing, but what’s interesting about it is that it’s really to discourage people from purchasing alcohol and tobacco products.
ReplyDeleteThis is really helpful because I do my taxes through Turbo tax and this past year was my first year of filing because I didn't get my first job until 2019. A lot of the questions they were asking me related to my income didn't make any sense but they said they'd tell me if I made a mistake or something, but it didn't and I got my tax return so it all ended up okay. Would you say income tax is proportional to how much you make or progressive as in you have to pay more as you make more worldwide? I know in the United States with the upcoming election tax rates are being called into question and Biden says that he wants to tax the rich more, but propaganda through the media has been saying he's going to do it to everyone. Thus, the topic you chose is very timely and we'll have to see the kind of tax Biden chooses.
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