Question

The three main types of federal taxes are income tax, excise tax, and payroll tax. Briefly describe each

Answer 1

Federal Income Tax: The federal income tax is the largest revenue building power possessed by the federal government. This means that each citizen must give a certain percentage of their income to the federal government. Payroll Tax: These taxes are deducted directly from your payroll and pay for programs such as Social Security, unemployment insurance, and Medicare. Excise Tax: An excise tax is a tax given to the producer of an item that is to be sold elsewhere. The excise tax is usually included when the producer sells the item to the retailer/seller.