Why do we pay taxes?
The government provides public goods and services for the community as a whole. To pay its bills, the government needs revenue, or a source of income. The money that the federal government uses to pay its bills comes mostly from taxes. Taxes shift resources from private individuals and businesses to the government.
There are 3 Basic Types of Taxes a US Citizen will Pay
You will pay taxes on what you earn, taxes on what you buy, and taxes on what you own.
Payroll Taxes: What is FICA?
FICA or the Federal Insurance Contributions Act consists of two payroll taxes that are paid for by employees and employers. Social Security makes up 6.2% and Medicare makes up 1.45% of the contributions per pay period.
Click on the Infographic provided by the Social Security Administration to learn more about FICA.
We pay both Income Tax (Federal, State and Local) and Payroll taxes each pay period.
Check out this infographic to see the difference between income tax and payroll taxes as provided by wallstreetmojo.com