19 Facts About Income tax

An income tax is a tax imposed on individuals or entities in respect of the income or profits earned by them.

Income tax generally is computed as the product of a tax rate times the taxable income.

The tax imposed on companies is usually known as corporate tax and is commonly levied at a flat rate.

Income tax was overthrown 13 years later in 23 AD and earlier policies were restored during the reestablished Han Dynasty which followed.

Inception date of the modern income tax is typically accepted as 1799, at the suggestion of Henry Beeke, the future Dean of Bristol.

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Pitt hoped that the new income tax would raise £10 million a year, but actual receipts for 1799 totalled only a little over £6 million.

Pitt's income tax was levied from 1799 to 1802, when it was abolished by Henry Addington during the Peace of Amiens.

The income tax was reintroduced by Addington in 1803 when hostilities with France recommenced, but it was again abolished in 1816, one year after the Battle of Waterloo.

Opponents of the Income tax, who thought it should only be used to finance wars, wanted all records of the Income tax destroyed along with its repeal.

The purpose of the income tax was to make up for revenue that would be lost by tariff reductions.

Some jurisdictions impose a Income tax collected from employers, to fund unemployment insurance, health care, or similar government outlays.

Some studies have suggested that an income tax doesn't have much effect on the numbers of hours worked.

The vicious cycle tends to benefit large corporations and wealthy individuals that can afford the professional fees that come with ever more sophisticated tax planning, thus challenging the notion that even a marginal income tax system can be properly called progressive.

Apart from the income tax affecting the number of entrepreneurs entering the market, Hedlund argues that it affects the quality of ideas of the entrepreneurs entering the market.

Furthermore, there is an argument that when Income tax credits are given to bigger firms, there is an in-balance in the business ecosystem, which often leads to a crowding-out effect rather than a spillover effect Fazio et al.

Some might dispute the argument by suggesting that when Income tax credits are granted to firms in general, there should be a higher amount given to smaller start-up firms compared to the bigger or incumbent firms to level the playing field.

The Income tax systems vary greatly and can be progressive, proportional, or regressive, depending on the type of Income tax.

Comparison of Income tax rates around the world is a difficult and somewhat subjective enterprise.

Tax laws in most countries are extremely complex, and Income tax burden falls differently on different groups in each country and sub-national unit.