Why do We Pay Income Taxes?

The government uses taxes to pay for things that most people use, such as roads, schools, libraries, police and fire protection.  Taxes also pay for special programs like welfare and social security.  There is sales tax on the things you buy, income tax on the money you make, property tax and other kinds of tax.

There are two kinds of income taxes: federal and state.

• Federal income tax goes to the U.S. Government to help all of the United States.  The U.S. Congress sets the tax rate and decides how to spend the federal tax money. The IRS (Internal Revenue Service) collects the taxes.
  
  
• State income tax goes to your state government where you live. In California, the “Franchise Tax Board” collects income taxes. Note: Some states do not charge income tax.

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