Tax Time in U.S.

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This is Bob Doughty with the VOA Special English Economics

April fifteenth is a special date for Americans. But it is no
holiday. It is tax day. It is the last day to pay any federal taxes
owed on earnings from the year before.

The Constitution gives Congress the power to establish federal
taxes. State and local governments can also tax. But the idea of
national taxes took time to develop. Not everyone liked the idea.

In seventeen-ninety-one Congress approved a tax on whiskey and
other alcoholic drink. Farmers in western Pennsylvania who produced
alcohol refused to pay. They attacked officials and burned the home
of a tax collector.

America's first president, George Washington, gathered almost
thirteen-thousand troops. The soldiers defeated the so-called
Whiskey Rebellion of seventeen-ninety-four. It was one of the first
times that the government used its powers to enforce a federal law
within a state.

At first the United States government collected most of its money
through tariffs. These are taxes on trade. In the late
eighteen-hundreds, Congress began to tax people's pay. The Supreme
Court rejected the personal income tax. But, in nineteen-thirteen,
the states passed the Sixteenth Amendment to the Constitution. This
gave Congress the right to tax income.

Today, personal income tax provides the government with more than
forty percent of its money. Taxes collected to pay for retirement
programs and other services provide thirty-five percent. Income
taxes on businesses provided seven percent of federal money in
two-thousand-two. And the government collects other taxes, including

The Internal Revenue Service collects federal taxes. The I.R.S.
is part of the Treasury Department. Most taxpayers do not owe the
agency any money on April fifteenth. Their employers have taken
income taxes from their pay all year and already given it to I.R.S.
In fact, most people get some money back. But tax laws are often
criticized as too complex.

The United States has what is called a progressive tax system.
Tax rates increase as earnings increase. This year people who earn
more than three-hundred-twelve-thousand dollars are taxed at
thirty-five percent. That is the highest rate. Individuals who earn
less than seven thousand dollars pay no income tax, but they do pay
other taxes.

This VOA Special English Economics Report was written by Mario
Ritter. This is Bob Doughty.