Tax Brackets

Federal Tax Brackets

Income Tax Brackets

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What is a federal tax? A federal tax is basically an amount that is charged to the taxpayer or an individual from the community as per some service charge or the purchase of any good or commodity. Federal tax is a type of a federal tax return, which means that this is the money that goes back to the state or the government so that they can provide welfare services to the people. This is a kind of a return that the government takes from the people of the community and to get the money circulated throughout the state. The government cannot simply keep on investing more money in to the state without getting any back, since in that case there are chances of the government going bankrupt.
There is usually tax brackets assigned in a progressive tax system. A progressive tax system is that government or state that increases the amount of taxes charged to an individual as per their increase in income. Those with less income level will have to pay lesser taxes and those with a higher income level will pay higher taxes. Such tax brackets are enforced to keep in mind, that the tax policy and the tax system is just and fair to everyone, since if the rich have to pay the same amount of taxes as the poor, then this won’t be fair to the poor, and if the poor have to pay the same amount of taxes as the rich, then they will surely not be able to cope up with the level of taxes. Now there are different tax brackets set in different states and countries. Some of them will be stated here.

  • Australia – the bracket varies from zero percent to around 45 percent depending on the income level. For people earning up to $6000, the federal tax is zero percent. Any higher than this and the level of tax will start to rise. As for individuals earning more than $180,000 the level of tax that they have to pay is 45 percent.
  • Canada – the bracket in Canada varies from zero percent to 20 percent. Individuals earning around $9000 do not have to pay any federal tax while those earning around $128,000 have to pay the highest level of tax which is 29 percent.
  • Malta – the tax bracket in Malta varies from no taxes to 35 percent tax being charged on the income level earned. Singles earning around €8500 do not have to pay any taxes, while those earning over €19,500 have to pay a 35 percent tax.
  • New Zealand – the brackets in this country vary from 10.5 percent to 45 percent. Note that the highest tax percentage being charged in almost all the countries is around 45 percent. Any higher than that becomes even costly, for those earning high salaries on a monthly basis. Those individuals earning around $14,000 have to pay a 10.5 percent tax, while those earning over $100,000 have to pay a 45 percent tax.
  • Singapore – in Singapore the brackets vary from $0 to $42,700 for income over $320,000. In some states the amount of tax charged is fixed for a specific range of income. However in other states there is a specific amount plus $1 for each number over the limit. This is done to keep a strict check on the regulation and circulation of money through the entire economy.
  • South Africa – this state applies the above mentioned rule, it charges from 18 percent tax to 40 percent tax depending on the level of income plus a fixed amount of money for each income. This increases the tax by a great deal and is applied where the poverty line is dangerously high and there are large disparities between the rich and the poor.
  • Switzerland – the state applies a progressive tax system and the tax bracket varies from zero percent to not more than 40 percent.
  • United States – the United States also has a progressive tax system and the brackets vary from 10 percent to 35 percent. Individuals earning around $8350 have to pay the lowest amount of tax which is 10 percent while those earning $370,000 have to pay a 35 percent tax.

These are some of the countries that apply tax bracket by enforcing the progressive tax system. These taxes are usually called federal tax. However, there are other taxes that individuals might have to pay also. The two main types of taxes are indirect taxes and direct taxes. Further divisions of taxes can also be made according to the types, which are as following:

tax rates

tax rates are a roll of the dice

  • Federal Income Tax charged to a specific amount of income level.
  • Sales Tax upon the purchase of good and commodities, or the use of a service.
  • State tax
  • Death tax charged upon the death of the owner and the transfer of his or her estate.
  • Capital Gains tax charged to organization and companies
  • Corporate tax charged to organizations and companies
  • Property tax charged for the ownership of a piece of land.
  • Taxes on payroll (same as income tax)
  • Inheritance tax is the tax charged upon the death of a member of the family.
  • Value added tax is the tax charged for adding increased and enhanced services to a good
  • Tariffs are excise duties charged while importing and exporting goods
  • Poll taxes are a fixed amount charged for using a state owned service.
  • License fees is charged to business owner for the conduction of business
  • Transfer tax is the tax charged to buy stamps necessary for the transfer of property. This is usually a fixed amount charged to everyone.
  • Wealth tax is the tax that has to be paid according to the net worth of a person’s business. Net worth is the amount if assets you own after all liabilities have been subtracted from it.
  • Expatriation tax is the tax that is charged to an individual if he or she renounces their citizenship. This tax is charged according to the property owned by the person.

These are just a few types of taxes charged by the state. You can see that the state is able to earn a sufficient amount of federal tax returns in order to keep on providing more welfare services to the people. Taxes are for the benefit of the community and everyone should pay their taxes with the utmost honesty, since if no one pays their due amount, then the services that they consume on a daily basis will not be present there in the first place.