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Who Pays Taxes?



Who Pays Taxes?

A Short Reader

Reading Level
     edHelper's suggested reading level:   grades 4 to 6
     Flesch-Kincaid grade level:   6.7

Vocabulary
     challenging words:    nonprofit, likewise, entire, federal, normally, budget, sales, goods, percentage, certain, people, earn, portion, state, government, income
     content words:    United States


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Who Pays Taxes?
By Erin Horner
  

1     Who pays taxes? People and businesses both pay taxes. These taxes are collected in different ways. Citizens pay income tax. Each year they pay the government a portion of their income. They are required by law to report their annual earnings and pay a percentage of that money to both the federal government and their state government. Normally, people who earn more money pay more taxes. They must pay a larger percentage of their income to the government than those who earn less.
 
2     People also pay taxes when they buy certain goods. In most states, the government charges consumers a certain percentage of an item's purchase price. This is called a sales tax. Sales tax is a surcharge. It is an extra charge that is added to certain goods.
 
3     Businesses must pay taxes too. They pay tax on their profits. Companies owe the government a portion of all of the money that they make each year.

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