What are the Different Types of Taxes?
A death tax is a tax on the right to
transfer property or to receive property upon death of the
owner. Death tax is an excise tax. When the death tax is
imposed on the right to pass property at death, it is
considered an estate tax whereas
when death tax imposed on the right to receive property from a
decedent, it is considered an inheritance tax.
The Federal Estate tax was part of the
Revenue Act of 1916.
Most states levy an inheritance tax, an
estate tax or both.
Gift tax is an excise tax levied on the
right to transfer property.
The Federal Gift Tax was first enacted
in 1932 and was intended to complement the estate tax. Only
taxable gifts are subject to the federal gift tax.
Only a few states now have state gift
tax such as Connecticut, Louisiana, North Carolina, and
Income taxes are levied by the Federal
government, most states, and some local governments.
Individuals, corporations and certain fiduciaries have to pay
This is the most important type of tax
to understand. The federal income tax is levied on
individuals as well as corporations and businesses.
Most states levy income taxes except
Alaska, Florida, Nevada, South Dakota, Texas,
Washington, and Wyoming. Some other states may have
income taxes on some types of income only.
Some cities also impose their own income
taxes such as Baltimore, Cincinnati, Cleveland, Detroit,
Kansas City (Missouri), New York, Philadelphia, St.