Type of tax refers to the classification or categorization of tax. Tax can be broadly categorized into two types, such as direct tax and indirect tax. However, the meaning differs according to the colloquial sense and the constitutional sense.
Tax is collected in terms of money or cash. In various countries, the rules and regulations regarding taxation are different and sometimes the nomenclature of the type of tax is different.
In the United States, under the colloquial sense some taxes may be considered as direct taxes, however, under the constitutional sense, they are considered as indirect taxes. For example, an estate tax or gift tax is an indirect tax under the U.S. constitutional regulation, however, colloquially, an estate tax or gift tax is regarded as a direct tax. Under the U.S. constitutional law, an indirect tax is also known as event tax. The property tax is regarded as a direct tax under this regulation.
In the United States, the taxation system is complicated in nature and it involves different tiers or segments of government. The taxation methods are variable in nature. Local authorities like municipal corporations, counties, provinces and local governments also impose taxes in the United States.
The Federal Tax Code of the United States is termed as the Internal Revenue Code of 1986 as per title 26 of the United States Code or USC. The tax collection services in the United States are performed by the Internal Revenue Services or IRS, which is a U.S. government agency.
According to the methods of calculation, there are two types of taxes in the United States and they are regular tax and the alternative minimum tax (AMT). The income tax is considered as a progressive tax in the United States because the more the income, the higher the income tax rate.
The different
types of taxes that are prevalent in the United States include the following:
- Federal income tax
- Payroll tax
- Capital gains tax or CGT
- Sales tax
- Flat tax
- Estate tax
- Excise tax
- Corporate tax
- Gift tax
- Transfer tax
- State income tax
- Property tax
- Consumption tax
- State or local sales tax
- City and county tax
- Toll tax
The payroll taxes can be further categorized into social security tax and medicare tax.
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