Bifalgorithm post · IntroductionToBusiness OP 8D04gAa · 2026-10-07-36573 · A.4. Understanding the Tax Environment of Business
How are taxes collected and used by different levels of government?
How are taxes collected and used by different levels of government? (IntroductionToBusiness OP 8D04gAa · 2026-10-07-36573 · A.4. Understanding the Tax Environm…
Ideas in this flowchart
- Taxes are viewed as the price paid to live in the country.
- All levels of government assess taxes on businesses and individuals to fund government services.
- Taxes are collected by federal, state, and local governments.
- The federal government collects 52 percent of all tax dollars.
- State governments are the next largest collectors, followed closely by local governments.
- The average American family pays about 37 percent of its income in taxes.
- About 28 percent of family income goes to the federal government.
- About 9 percent goes to state and local governments.
- Income taxes are based on income received by businesses and individuals.
- Congress sets federal income taxes, the Internal Revenue Code regulates them, and the IRS collects them.
- Federal income taxes are progressive: tax rates increase as income increases.
- Most states and some large cities collect income taxes and establish their own rules and rates.
