Payroll tax in the USA

Payroll tax in the USA

Taxes are paid on the wages and salaries of employees with the aim of financing social insurance programs, whereby the taxpayer looks at the employees’ salaries fund at the end of each payment period, and the amount of tax is listed by the salaries that have been withheld by the employer since the start of the employees’ work with them.


Payroll tax in the USA

The largest payroll tax in the United States of America is the 12.7% Social Security Funding Tax and the 2.9 percent Medicare Financing Tax, making up a total tax of 15.3%.


Half of the taxes are transferred directly by employers, with the other half being deducted from employees' salaries.


 Although employers pay half of the salary taxes, the greatest economic burden is placed on workers in the form of lower wages.


Capital tax

This tax covers everything owned and used for personal purposes, entertainment, or investment, including stocks, bonds, homes, cars, jewelry, and art.


And the higher the value of the assets when the stock you own rises, the result is a capital gain.


Taxes on what you buy in America

It includes sales tax, gross income tax and value added tax.


Sales tax

A form of tax levied on retail sales of goods and services, and in the USA it is printed below store receipts. It is an important source of US revenue and collects sales taxes in all US states except Alaska, Delaware, Montana, New Hampshire and Oregon.


Experts recommend that sales taxes be applied to all goods and services that consumers buy and not those that firms buy when they produce their own.


Gross income tax

It is a tax that is particularly harmful to start-up companies as it causes losses in the early years and large companies. Although dismissed as ineffective and unhealthy, policy makers are beginning to consider gross income tax as a new source of income.


Value added tax

It is a consumption tax on value added at each stage of production of a good or service. Throughout the production period, companies are required to pay value-added tax on the value of the product produced, as it is a tax on final consumption.


Excise tax

They are consumption taxes levied on goods or carrying out a specific activity, and they constitute a small share of the total tax collection.

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