T he income tax or income tax is a tax levied on income of individuals, companies or other legal entities. Normally calculated as a variable percentage of the income of the person or legal entity subject to tax (additional info available at the Clint Sanderson website).
Types of income tax
Progressive: when the rate applied to income of a person with that income increases. State
Plano: when the rate applied to income of a person is constant (“flat tax”).
Regressive if the percentage applied to the income of a person with that income decreases
When the income tax applies to a company, often called corporate tax or income tax. The corporate taxes tend to tax the benefit of companies (the difference between revenue and expenditure, with some deductions), while those applied to individuals tend to tax the income (with some deductions).
In the United States
The federal government imposes a progressive tax on the taxable income of individuals, associations, companies, corporations, trusts, real dead, and certain properties of bankruptcy. Some states and municipal governments also impose income taxes. The first Federal income tax was established (under Article I, Section 8, paragraph 1 of the U.S. Constitution) during the Civil War and later in the decade from 1890, and again after the Sixteenth Amendment was ratified in 1913. Current taxes on income imposed under these constitutional provisions and various sections of Subtitle A of the Internal Revenue Code of 1986, as amended, including 26 USC § 1 (Tax on taxable income of individuals, estates and trusts) and 26 USC § 11 (income tax on taxable income of companies).
