income tax

Income tax is a government fee you pay based on how much money you make. In the U.S., federal income tax helps pay for defense, education, health care, and much more.

Most states collect income tax, and everyone who works in the U.S. and makes a minimum salary also pays a federal income tax. The first such tax was imposed in 1861, to help the government pay for the Civil War, and in 1913 income tax became permanent. While most people don't love giving up a percentage of their income, it's hard to imagine the government functioning without income tax.

Definitions of income tax
  1. noun
    a personal tax levied on annual income
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    types:
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    bracket creep
    a movement into a higher tax bracket as taxable income increases
    estimated tax
    income tax paid periodically on income that is not subject to withholding taxes; based on the taxpayer's predicted tax liability
    FICA
    a tax on employees and employers that is used to fund the Social Security system
    withholding, withholding tax
    income tax withheld from employees' wages and paid directly to the government by the employer
    supertax, surtax
    an additional tax on certain kinds of income that has already been taxed
    PAYE, pay as you earn
    the British system of withholding tax
    type of:
    revenue enhancement, tax, taxation
    charge against a citizen's person or property or activity for the support of government
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