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An income tax is a tax imposed on individuals or entities (taxpayers) in respect of the income or profits earned by them. Income tax generally is computed as the product of a tax rate times the taxable income. Taxation rates may vary by type or characteristics of the taxpayer and the type of income.
Social class in the United States refers to the idea of grouping Americans by some measure of social status, typically by economic status. However, it could also refer to social status and/or location. The idea that American society can be divided into social classes is disputed, and there are many competing class systems.
A progressive tax is a tax in which the tax rate increases as the taxable amount increases. The term progressive refers to the way the tax rate progresses from low to high, with the result that a taxpayer's average tax rate is less than the person's marginal tax rate. The term can be applied to individual taxes or to a tax system as a whole. Progressive taxes are imposed in an attempt to reduce the tax incidence of people with a lower ability to pay, as such taxes shift the incidence increasingly to those with a higher ability-to-pay. The opposite of a progressive tax is a regressive tax, such as a sales tax, where the poor pay a larger proportion of their income compared to the rich.
The cost of living is the cost of maintaining a certain standard of living for an individual or a household. Changes in the cost of living over time can be measured in a cost-of-living index. Cost of living calculations are also used to compare the cost of maintaining a certain standard of living in different geographic areas. Differences in the cost of living between locations can be measured in terms of purchasing power parity rates. A sharp rise in the cost of living can trigger a cost of living crisis, where purchasing power is lost and, for some people, their previous lifestyle is no longer affordable.
Bracket creep is usually defined as the process by which inflation pushes wages and salaries into higher tax brackets, leading to fiscal drag. However, even if there is only one tax bracket, or one remains within the same tax bracket, there will still be bracket creep resulting in a higher proportion of income being paid in tax. That is, although the marginal tax rate remains unchanged with inflation, the average tax rate will increase.
Tax brackets are the divisions at which tax rates change in a progressive tax system. Essentially, tax brackets are the cutoff values for taxable income—income past a certain point is taxed at a higher rate.
In a tax system, the tax rate is the ratio at which a business or person is taxed. The tax rate that is applied to an individual's or corporation's income is determined by tax laws of the country and can be influenced by many factors such as income level, type of income, and so on. There are several methods used to present a tax rate: statutory, average, marginal, flat, and effective. These rates can also be presented using different definitions applied to a tax base: inclusive and exclusive.
The United States federal government and most state governments impose an income tax. They are determined by applying a tax rate, which may increase as income increases, to taxable income, which is the total income less allowable deductions. Income is broadly defined. Individuals and corporations are directly taxable, and estates and trusts may be taxable on undistributed income. Partnerships are not taxed, but their partners are taxed on their shares of partnership income. Residents and citizens are taxed on worldwide income, while nonresidents are taxed only on income within the jurisdiction. Several types of credits reduce tax, and some types of credits may exceed tax before credits. Most business expenses are deductible. Individuals may deduct certain personal expenses, including home mortgage interest, state taxes, contributions to charity, and some other items. Some deductions are subject to limits, and an Alternative Minimum Tax (AMT) applies at the federal and some state levels.
Income tax in Australia is imposed by the federal government on the taxable income of individuals and corporations. State governments have not imposed income taxes since World War II. On individuals, income tax is levied at progressive rates, and at one of two rates for corporations. The income of partnerships and trusts is not taxed directly, but is taxed on its distribution to the partners or beneficiaries. Income tax is the most important source of revenue for government within the Australian taxation system. Income tax is collected on behalf of the federal government by the Australian Taxation Office.
Taxation in the Netherlands is defined by the income tax, the wage withholding tax, the value added tax and the corporate tax.
Secondary poverty is a description of poverty referring to those living below the poverty line whose income was sufficient for them to live above the line, but was spent on things other than the necessities of life.
Income inequality has fluctuated considerably in the United States since measurements began around 1915, moving in an arc between peaks in the 1920s and 2000s, with a 30-year period of relatively lower inequality between 1950 and 1980.
Taxation in Denmark consists of a comprehensive system of direct and indirect taxes. Ever since the income tax was introduced in Denmark via a fundamental tax reform in 1903, it has been a fundamental pillar in the Danish tax system. Today various personal and corporate income taxes yield around two thirds of the total Danish tax revenues, indirect taxes being responsible for the last third. The state personal income tax is a progressive tax while the municipal income tax is a proportional tax above a certain income level.
Qualified dividends, as defined by the United States Internal Revenue Code, are ordinary dividends that meet specific criteria to be taxed at the lower long-term capital gains tax rate rather than at higher tax rate for an individual's ordinary income. The rates on qualified dividends range from 0 to 23.8%. The category of qualified dividend was created in the Jobs and Growth Tax Relief Reconciliation Act of 2003 – previously, there was no distinction and all dividends were either untaxed or taxed together at the same rate.
A Massachusetts general election was held on November 8, 1994 in the Commonwealth of Massachusetts.
In Albania, taxes are levied by both national and local governments. Most important revenue sources, include the income tax, social security, corporate tax and the value added tax, which are all applied on the national level. The Albanian Taxation Office is the revenue service of Albania.
Taxes in Germany are levied at various government levels: the federal government, the 16 states (Länder), and numerous municipalities (Städte/Gemeinden). The structured tax system has evolved significantly, since the reunification of Germany in 1990 and the integration within the European Union, which has influenced tax policies. Today, income tax and Value-Added Tax (VAT) are the primary sources of tax revenue. These taxes reflect Germany's commitment to a balanced approach between direct and indirect taxation, essential for funding extensive social welfare programs and public infrastructure. The modern German tax system accentuate on fairness and efficiency, adapting to global economic trends and domestic fiscal needs.
Tax policy and economic inequality in the United States discusses how tax policy affects the distribution of income and wealth in the United States. Income inequality can be measured before- and after-tax; this article focuses on the after-tax aspects. Income tax rates applied to various income levels and tax expenditures primarily drive how market results are redistributed to impact the after-tax inequality. After-tax inequality has risen in the United States markedly since 1980, following a more egalitarian period following World War II.
The income tax threshold is the income level at which a person begins paying income taxes. The income tax threshold equates to the:
The Elephant Curve, also known as the Lakner-Milanovic graph or the global growth incidence curve, is a graph that illustrates the unequal distribution of income growth for individuals belonging to different income groups. The original graph was published in 2013 and illustrates the change in income growth that occurred from 1988 to 2008. The x axis of the graph shows the percentiles of the global income distribution. The y axis shows the cumulative growth rate percentage of income. The main conclusion that can be drawn from the graph is that the global top 1% experienced around a 60% increase in income, whereas the income of the global middle increased 70 to 80%.
References
- ↑ Frankenfield, Jake (2019-11-20). "Which Income Class Are You?". Investopedia . Retrieved 2020-05-24.
- ↑ Routley, Nick (May 8, 2019). "How the Composition of Wealth Differs, from the Middle Class to the Top 1%". Visual Capitalist.
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