Final answer:
Individuals and entities are generally treated as separate taxpayers in the U.S. taxation system. Independent contractors are responsible for paying taxes on their earnings, and the tax code contains a variety of provisions, such as differing tax schedules and potential deductions, that influence the overall tax liability.
Step-by-step explanation:
In the context of U.S. taxation, individuals and entities are typically treated as separate taxpayers. This means that each person or entity is responsible for calculating and paying taxes on their own income. Independent contractors, including those in the '1099' or 'gig economy', are required to pay taxes on their earnings, similar to traditional employees. However, the tax code contains various provisions that affect how much tax is paid. For example, different income tax rate schedules exist for single taxpayers, married taxpayers filing jointly, and head of household filers. There are also deductions, exemptions, and credits that can lower the amount of tax owed. Furthermore, the taxation system aims to be fair, and discussions about fairness often focus on the notion of paying taxes in proportion to what one earns and closing tax loopholes.