Final answer:
The U.S. federal individual income tax system operates on a graduated progressive tax structure where tax rates increase with income. The personal income tax is the government's largest revenue source, though it is less than half of total federal tax revenue.
Step-by-step explanation:
The federal individual income tax system in the United States uses a graduated progressive tax structure. This system is designed so that the percentage of income paid in taxes increases as an individual's total income increases. In essence, as one makes more money, they are expected to pay a higher rate of taxes on their income.
There are two central principles regarding taxation: the benefit principle and the ability to pay principle. The benefit principle suggests that those who benefit from government services should pay in proportion to the benefits they receive, while the ability to pay principle posits that those with greater financial resources should bear a larger share of the tax burden.
The personal income tax is the largest single source of federal government revenue, yet it accounts for less than half of all federal tax revenue. Other categories of federal taxes include corporate income taxes and social insurance and retirement receipts.
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