We should pay our taxes regularly so that the government uses these taxes to pay for such facilities as roads, schools, libraries, police and fire protection
We pay taxes because the federal, state, and municipal governments enact tax laws. That tax revenue pays for a variety of government services. The federal government collects about the same as the state and local governments combined.
Kinds of Taxes
Federal. The federal government will receive $3.4 trillion in tax revenue in fiscal year 2019. Half comes from personal income taxes. A third comes from payroll taxes, which is also a tax on income. Corporate taxes only pay 10 percent of the burden. The rest is paid by excise taxes, tariffs, estate taxes, and earnings from the Federal Reserve's holdings.
State. States collected almost $1.6 trillion in 2016 (most recent available). More than one-third of state revenue comes from the federal government. Most of that pays for the Medicaid health care program for low-income families.
Sales taxes contribute 23.1 percent. Income taxes contributed 18 percent. Charges and fees for state universities, public hospitals, and toll roads add another 18 percent. States receive 5 percent of their income from license fees, estate taxes and severance taxes. Only 2.4 percent is from corporate income taxes. States keep business taxes low because they compete to attract companies and their jobs.
Local. This category includes cities, school districts, and counties. They collected $1.6 trillion in 2016. More than one-third of their revenue comes from intergovernmental transfers. That includes state government aid for school districts and federal government payments for low-income housing.
Property taxes contribute 29.8 percent. Fees for water, sewage, and parking meters add 22.6 percent. Sale taxes furnish 7.2 percent. Some cities charge stadium and business license fees, supplying 2.4 percent to the total local revenue base. Other cities also charge income taxes, providing 2 percent to the total.