Changes

'''Income tax''' is a tax levied by government on the income of individuals and businesses.  The income tax was first introduced in the [[United States]] in 1862 as a levy on the salary of federal officers. In 1913, the [[Sixteenth Amendment]] to the Constitution made clear the federal government can collect taxes from any source. The Amendment won near-unanimous support from conservatives at the time. The federal income tax started low but became high during [[World War I]]; it was lowered in the 1920s by the conservatives.  Most states and some localities (especially New York City) levy their own income tax. Taxes were raised by Republican President [[Herbert Hoover]] in 1932, and jumped to very high levels during [[World War II]] to pay for the war.  The '''[[Withholding|withholding tax]]''' was introduced in 1943 so people would pay taxes from every paycheck, instead of waiting until next spring.<ref>The withholding tax was devised by economist [[Milton Friedman]], at the time a liberal.</ref>

'''Income tax''' is a tax levied by government on the income of individuals and businesses.  The income tax was first introduced in the [[United States]] in 1862 as a levy on the salary of federal officers. In 1913, the [[Sixteenth Amendment]] to the Constitution made clear the federal government can collect taxes from any source. The Amendment won near-unanimous support from conservatives at the time. The federal income tax started low but became high during [[World War I]]; it was lowered in the 1920s by the conservatives.  Most states and some localities (especially New York City) levy their own income tax. Taxes were raised by Republican President [[Herbert Hoover]] in 1932, and jumped to very high levels during [[World War II]] to pay for the war.  The '''[[Withholding|withholding tax]]''' was introduced in 1943 so people would pay taxes from every paycheck, instead of waiting until next spring.<ref>The withholding tax was devised by economist [[Milton Friedman]], at the time a liberal.</ref>

Income taxes are collected by the [[Internal Revenue Service]].  [[Republicans]], believing in a smaller, more efficient, and less expensive government, work hard to cut income taxes.

Income taxes are collected by the [[Internal Revenue Service]].  [[Republicans]], believing in a smaller, more efficient, and less expensive government, work hard to cut income taxes.

Since the Reagan Revolution of the 1980s, the top income tax rate paid by the rich has fallen sharply. However the proportion of GDP absorbed by federal taxes has remained constant at about 20%, in accord with &quot;Hauser's Law&quot;.&lt;ref&gt; See [http://online.wsj.com/article/SB121124460502305693.html David Randon, &quot;You Can't Soak the Rich,&quot; ''Wall Street Journal'' May 20, 2008]&lt;/ref&gt;

Since the Reagan Revolution of the 1980s, the top income tax rate paid by the rich has fallen sharply. However the proportion of GDP absorbed by federal taxes has remained constant at about 20%, in accord with "Hauser's Law".<ref> See [http://online.wsj.com/article/SB121124460502305693.html David Randon, "You Can't Soak the Rich," ''Wall Street Journal'' May 20, 2008]</ref>

[[Image:Hauserlaw.jpg|thumb|275px]]

[[Image:Hauserlaw.jpg|thumb|275px]]

==Year 2007 income brackets and tax rates==

==Year 2007 income brackets and tax rates==

An individual's marginal income [[tax bracket]] depends upon their [[income]] and their tax-filing classification. As of 2007, there are six tax brackets for ordinary [[income]] (ranging from 10% to 35%) and four classifications: single, married filing jointly (or qualified widow or widower), married filing separately, and [[Head of Household (Tax)|head of household]].

An individual's marginal income [[tax bracket]] depends upon their [[income]] and their tax-filing classification. As of 2007, there are six tax brackets for ordinary [[income]] (ranging from 10% to 35%) and four classifications: single, married filing jointly (or qualified widow or widower), married filing separately, and [[Head of Household (Tax)|head of household]].

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! width=75 | Marginal Tax Rate

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[[Category:Economics]]

[[Category:Economics]]

[[Category:Business]]

[[Category:Business]]

[[Category:Taxation]]

[[Category:Taxation]]