<P> Taxes are imposed on net income of individuals and corporations by the federal, most state, and some local governments . Citizens and residents are taxed on worldwide income and allowed a credit for foreign taxes . Income subject to tax is determined under tax accounting rules, not financial accounting principles, and includes almost all income from whatever source . Most business expenses reduce taxable income, though limits apply to a few expenses . Individuals are permitted to reduce taxable income by personal allowances and certain non-business expenses, including home mortgage interest, state and local taxes, charitable contributions, and medical and certain other expenses incurred above certain percentages of income . State rules for determining taxable income often differ from federal rules . Federal tax rates vary from 10% to 39.6% of taxable income . State and local tax rates vary widely by jurisdiction, from 0% to 13.30% of income, and many are graduated . State taxes are generally treated as a deductible expense for federal tax computation . In 2013, the top marginal income tax rate for a high - income California resident would be 52.9% . </P> <P> The United States is one of two countries in the world that taxes its non-resident citizens on worldwide income, in the same manner and rates as residents; the other is Eritrea . The U.S. Supreme Court upheld the constitutionality of imposition of such a tax in the case of Cook v. Tait . </P> <P> Payroll taxes are imposed by the federal and all state governments . These include Social Security and Medicare taxes imposed on both employers and employees, at a combined rate of 15.3% (13.3% for 2011 and 2012). Social Security tax applies only to the first $106,800 of wages in 2009 through 2011 . However, benefits are only accrued on the first $106,800 of wages . Employers must withhold income taxes on wages . An unemployment tax and certain other levies apply to employers . Payroll taxes have dramatically increased as a share of federal revenue since the 1950s, while corporate income taxes have fallen as a share of revenue . (Corporate profits have not fallen as a share of GDP). </P> <P> Property taxes are imposed by most local governments and many special purpose authorities based on the fair market value of property . School and other authorities are often separately governed, and impose separate taxes . Property tax is generally imposed only on realty, though some jurisdictions tax some forms of business property . Property tax rules and rates vary widely with annual median rates ranging from 0.2% to 1.9% of a property's value depending on the state . </P>

Who gets taxed the most in the us