What levels of government impose taxes on the income of its citizens and businesses?

Answer 1

At the federal level:
Article 1, Section 7 of the Constitution.
"All Bills for raising Revenue shall originate in the House of Representatives; but the Senate may propose or concur with Amendments as on other Bills."

In the U.S., tax laws start in the House of Representatives as a bill. Once passed by the House, it goes to the Senate. Once the Senate passes the bill, it is forwarded to the President and it is signed into law.

At the State level, it is close to the same, however it does depend upon the State's constitution. The legislature will usually propose and pass a funding bill and it will be signed into a state law by the Governor.

At the local level, usually a city council or board of county commissioners will make local laws concerning property taxes and other local taxes.

Answer 2

Any level of government can; Federal, State, County & Local.