Did you know that the current tax system in the US is based on the Revenue Act of 1913? It was created to replace high tariffs that were seen prior to that.
These days we have a personal income tax system that has evolved over the past century or so. Unfortunately, most of us know little about the US tax. Frankly, the tax system can be a bit complex but luckily, PDFelement has compiled interesting some interesting facts about the US tax through a nice looking infographic. Here are 4 interesting facts that strike out from this compilation.
The US Tax Burden is Way Lower Than Other Developed Countries
Yes, you got that right! Tax burdens are calculated as a percentage of GDP which basically shows share of a country’s output that is collected by the government through tax. In other words, this metric is important in showing the degree to which a government controls a country’s resources. Now, compared to other developed countries like France, Germany, the UK, Italy, Japan or Canada, the US has got the lowest tax burden of the bunch. The tax burden is 26% of GDP compared to the highest in the pack i.e France which has a 46% tax of GDP. Let’s just say that US citizens know all about low level of taxes compared to many other developed states.
Most U.S. tax revenue comes from personal taxes on income and social security contributions
Now, most of the taxes fetched by the government come from personal taxes and social security contributions which come in the shape of income taxes and payroll taxes. The government imposes high corporate taxes to companies in the US, no wonder many companies have resorted to reducing investments or even moving operations to other countries around the globe. From the infographic stats, it can be seen corporate taxes amount to 10% of revenue stream while custom excise taxes, estate taxes and Federal Reserve Net Income make up the remaining 7% of revenue sources.
Most Americans Use Their Tax Refunds For Savings and Debt Payments
A tax refund is a refund on your taxes if your tax liability is less than your taxes. This usually applies to any citizen who pays an advance or self-assessment tax amounts higher than the tax liability. Anyone eligible can apply for a tax refund when filing your income tax returns for the financial year. According to a survey done by GoBanking Rates, the average tax refund per person was $2763 based on a survey done on 2500 participants. Most of those who get tax refunds used it for savings and servicing debts. Only about 21% of those people in the survey used it to make purchases or go on a vacation.
Americans Above 65 Years Are More Likely To Spend Tax Refunds on Binge Purchases
Talking about tax refund, the other interesting bit is that adults above 65 years spend more on splurge purchase than millennials! Yes, and they also used the cash to have a good time on a vacation. Those between 25 and 34 years looked to service debts judging by the stats-they have the highest tendency of using tax refunds to clear outstanding debts.
Well, you can get more details about this interesting stats and more from the infographic. In fact, you will also get a cool guideline on how to file for a tax refund. Remember, the deadlines are drawing closer so you should file for your tax refund with IRS ASAP!
