americans pay many different types of taxes to federal, state, and local governments. Choose the best example of a tax that we do NOT pay in the U.S.?
A.payroll taxes
B.value-added taxes
C.sales taxes
D.income taxes
Let's see.
Since I just had my taxes figured, I know I pay federal and state income taxes. When I was working, payroll taxes were deducted from my pay checks. In Europe I paid value-added taxes. And here in the States, I pay state sales taxes on everything I buy except groceries.
The best example of a tax that Americans do not pay in the U.S. is option B: value-added taxes (VATs).
To arrive at this answer, we need to understand what each of the options represents.
A) Payroll taxes: Americans do pay payroll taxes, which are deducted from their wages to fund social programs such as Social Security and Medicare.
B) Value-added taxes (VATs): VATs are commonly used in several countries around the world, but they are not levied in the United States. A VAT is a consumption tax imposed on the value added to goods and services at each stage of production or distribution.
C) Sales taxes: Sales taxes are imposed at the state and local level in the United States. They are typically a percentage of the purchase price of goods and services and are collected at the point of sale.
D) Income taxes: Americans do pay federal, state, and sometimes even local income taxes. These taxes are based on their earnings and other sources of income.
Therefore, out of the options provided, option B (value-added taxes) is the tax that Americans do not pay in the United States.