Final answer:
Income tax on business earnings is payable to the Federal Government. Corporate income taxes constitute a major portion of federal revenue, underlining the federal government's role in collecting this tax from businesses.
Step-by-step explanation:
Income tax on business earnings is payable to the Federal Government. The government requires income, or revenue, to operate and businesses and corporations generate that income. While employers usually pay federal, state, and local taxes, it's important to note that the federal government is the primary entity collecting income taxes from businesses. Corporate income taxes are a significant source of revenue for the federal government and are due on the profits earned by corporations, as corporations are considered separate legal entities.
Business owners are responsible for paying various types of taxes, including income tax, employment tax, unemployment compensation, social security insurance, and excise tax. Some state governments also charge payroll taxes. Therefore, while the type of business might influence the specific taxes payable, it is the federal government that collects corporate income taxes.
The taxation patterns of the federal government include individual income taxes, corporate income taxes, and social insurance and retirement receipts. The personal income tax is the largest source of federal government revenue, but corporate income taxes still represent a substantial portion of federal tax revenue.