<P> The United States of America has separate federal, state, and local government (s) with taxes imposed at each of these levels . Taxes are levied on income, payroll, property, sales, capital gains, dividends, imports, estates and gifts, as well as various fees . In 2010, taxes collected by federal, state, and municipal governments amounted to 24.8% of GDP . In the OECD, only Chile and Mexico are taxed less as a share of their GDP . </P> <P> However, taxes fall much more heavily on labor income than on capital income . Divergent taxes and subsidies for different forms of income and spending can also constitute a form of indirect taxation of some activities over others . For example, individual spending on higher education can be said to be "taxed" at a high rate, compared to other forms of personal expenditure which are formally recognized as investments . </P> <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>

Who has to pay taxes in the united states