Final answer:
The United States utilizes a progressive tax rate structure where tax rates increase with higher income levels. The main sources of federal revenue are individual income tax and FICA taxes for Social Security and Medicare.
Step-by-step explanation:
The basic tax rate structure in the United States is progressive. This means that the rate of taxation increases as the taxable amount increases. In a progressive tax system, lower-income earners pay a smaller percentage of their income in taxes compared to higher-income earners.
For example, in the United States, as someone's income rises, they enter higher tax brackets with higher marginal tax rates. These rates do not apply to the income previously earned but only to the additional income within each higher bracket.
The U.S. has several sources of federal revenue, with the largest being the individual income tax, followed by the FICA taxes for Social Security and Medicare. Other sources include excise taxes, gift taxes, customs duties, and user fees. Understanding the structure of the tax system is crucial for understanding the distribution of tax burdens across different income levels.
The basic tax rate structure in the United States is 4) Progressive. A progressive tax system is one where the tax rate increases as income increases.
In the United States, the federal income tax is an example of a progressive tax. As income rises, so does the percentage of income one must pay in federal income taxes. Other countries may have even higher tax rates at higher income levels.