Federal income tax....?

Question

Ok, I'm researching things about federal income tax. Why is it good? Does it even help the US? If yes, how?

Answer 1

There are alternatives to the federal income tax system, which is a modified graduated tax (meaning the rates gradually increase as the taxpayer's income increases). Those alternatives are usually proposed by right wing candidates as Fred Thompson and Mike Huckabee have this year. Thompson has proposed a flat tax, meaning few or no deductions and a single tax rate. That would help richer persons in higher brackets under current law and persons in low tax/no tax states who are subsidizing people in high tax states who are deducting their state income taxes on their federal tax returns. Occasionally, the proposal for a national sales tax comes up. The rap on that is that it is regressive and hits people who spend. Poor and middle class people spend a greater percentage of their income than the rich. Most European countries have both an income tax and a form of national sales tax called a value added tax. Sales taxes are paid by the ultimate consumer. VAT is paid at every sale throughout the economy, thereby driving up the price to the consumer, but it is a hidden tax and is low maintenance, nobody has trouble computing their sales tax hit.

Answer 2

does Alaska have to pay Federal income tax?

Answer 3

Besides raising revenue to run the government, it redistributes income from the richer segment of the population to the poorer one. You could probably argue on both sides of that.