Tax And Social Security In America

Tax And Social Security In America
Tax is a common feature of the American landscape, and comes in myriad forms. With federal, state and local levels of government in America there are ample opportunities to get taxed. Like death, taxes in America are unavoidable and the Internal Revenue Service (IRS) was created to make sure everyone pays up.

The most basic kind of tax you’ll pay is income tax on your employment. The percentage of income tax you pay each year depends on whether you are single, married or have children. The highest tax bracket is around 35 per cent but most workers pay around 15 to 25 per cent. There are lots of deductions you can claim to lower your overall taxation even more. Many would argue there are simply too many tax deductions, which is why the US tax code runs about 3,000 pages long.

You pay both state and federal income tax from your wages, and at the end of the year when you file you annual tax return you might get some of those taxes back in the form of a tax refund. Each month you also have to pay into the national Social Security fund, which is the third deduction from your paycheck.

Other taxes most people pay are state-level sales taxes on goods that you purchase. Every state has its own rules and rates of taxation. Some states tax food, while others don’t. A very few states like Oregon have no sales tax at all. Most of the other taxes Americans pay are hidden inside the cost of the product or service. Every gallon of gas you buy has an 18-cent tax tucked into it. The same is true for products like alcohol and tobacco.

Social Security is the program created as a national pension fund for American workers. The idea is a good one, but over the years since it was started in 1935 the federal government has squandered away literally that entire savings to pay off other debts. The question looming large in many American’s minds these days is whether there will be any money left to pay them when they finally reach the retirement age of 65 and can begin receiving their monthly check.

When citizens turns 65 (or 62, in some cases), they are eligible to collect their Social Security, which is paid out monthly based on the amount contributed over their working lifetime. The longer you wait to begin collecting Social Security the higher percentage of your amount you actually receive, which caps out at 70 years old.