What are the Different Types of Taxes?
Two main types of employment taxes are
The FICA taxes has two components:
Social Security tax and Medicare Tax.
FUTA taxes exist to provide funds states
use to provide unemployment benefits.
Other US taxes
There are other types of taxes in the US
that are important such as:
The Federal Customs Duties taxes have
been known by different names such as tariff on imported
goods, excise tax, or customs duties or levies.
Common state and local taxes are:
Most states impose a franchise tax
on corporation for the right to do business in that
Occupational taxes are taxes on
various trades or businesses such as liquor store
license, a taxicab permit or a fee to practice certain
professions such as law, medicine or accounting.
Proposed taxes in the USA
There are talks and discussions of other
types of taxes that may be good in the US such as:
The Flat Tax would replace the existing
taxing system with a single tax rate. This is a very simple
The value added tax would replace the
federal income tax. A business would pay the VAT on all the
materials and services required to manufacture its product.
VAT is a tax on consumption. Most civilized countries have
the VAT system implemented.
The proposal of the US National Sales
Tax is also called the Fair Tax and would be on all
purchases collected at the final sale of goods and
services, unlike the VAT. The National Sales Tax would also
replace the federal income tax.