Government Taxation Research Paper Example | Topics and Well Written Essays - 500 words

Government Taxation - Research Paper Example Income tax Every citizen in the United States is obliged to paying income tax regardless of the place the citizen stays in the country. Each state in the United States has its own state income and sets the amount that the citizens have to pay. A good number of states have extra state income tax while others they at all have no state income tax. Others still apply state income tax to dividend income as well as to interest. Other types of income tax applied in the states are personal income tax, and retirement income tax (Mikesell 2011). Income tax is very useful in the economy of the United States. It permits a progressive taxation on the quantity of cash an individual makes which is an essential scheme that helps in distributing wealth equally. The progressive taxation program also allows the government to stabilize the income stream even in times of depression (Mikesell 2011). Another advantage of income tax is that it is easy to collect since it is automatically r emoved from the paycheck of the citizen. Besides, income tax has its limitations in that the system is very complex. The tax code used is said to be favoring the poor and being unfair to the wealthy. Property tax This is another type of tax in the United States of America which is paid by property owners to the state. Often, the states that which do not have state income tax often have put the burden on the property tax. The rates of the property tax in such states are very high. The rates often vary due to the area in which it is applied, town, city or county. These taxes are very useful since they assist in paying for public services such as community colleges, public schools, and other matters concerned by the local government (Molly 2009). Property owners will be charged tax on the basis of the land in use, any improvement to the land as well as any structures that are not permanent to