Tax

TAXES

Knowing the tax rules can help you plan your financial life and not pay more than necessary. Pretty much everyone pays some taxes, whether they are federal, state, local income taxes, sales taxes, property taxes, or capital gains.

FEDERAL INCOME TAX Guide
What Is Federal Income Tax?
The U.S. federal income tax is a tax levied by the Internal Revenue Service (IRS) on the annual earnings of individuals, corporations, trusts, and other legal entities. Federal income taxes apply to all forms of earnings that make up a taxpayer’s taxable income, including wages, salaries, commissions, bonuses, tips, investment income, and certain types of unearned income.
In the U.S., federal income tax rates for individuals are progressive, meaning that as taxable income increases, so does the tax rate. Federal income tax rates range from 10% to 37% and kick in at specific income thresholds. The income ranges the rates apply to are called tax brackets. Income that falls within each bracket is taxed at the corresponding rate.
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The federal corporate tax rate is a flat 21% (reduced from 35% by the Tax Cuts and Jobs Act, passed into law at the end of 2017).

Governments use the money collected through federal taxes to pay for the growth and upkeep of the country. Some look at federal tax as “rent” charged to live in a country or the fee to use the resources provided by a country. When you pay tax to the U.S. government, you’re in effect investing in your economy, as the government uses the funds to do the following:

* Build, repair, and maintain infrastructure
* Fund the pensions and benefits of government workers
* Fund Social Security programs
* Fund major health programs, including Medicare, Medicaid, CHIP, and marketplace subsidies
* Fund “safety net” programs to assist lower-income households
* Fund defense and international security programs
* Improve sectors such as education, health, agriculture, utilities, and public transportation
* Embark on new feats such as space exploration
* Provide emergency disaster relief

Key Terms

Tax Identification Number
This is a nine-digit tracking number used by the Internal Revenue Service (IRS) and is required on all tax returns. It is required information on all tax returns filed with the IRS. The IRS issues all U.S. tax identification

Inheritance Tax
Some states impose these taxes on heirs. Unlike the estate tax, which is paid by the deceased’s estate, this tax is paid by the beneficiary. States that charge inheritance taxes: Iowa, Kentucky, Maryland, Nebraska,

Excise Tax
Largely paid by businesses on goods and services at purchase, these taxes can be ad valorem (a percentage of the cost) or specific (a set dollar amount). Excise taxes levied on goods with a high social cost

Indirect Tax
These taxes are paid by the manufacturer or retailer, not the consumer, but are passed on to the consumer in the form of higher costs. Excise taxes on fuel, alcohol, and tobacco are one

Sales Tax
A consumption tax imposed on goods and services, a sales tax is paid at the point of sale by the consumer and is collected by the seller. A manufacturer at an interim step in the manufacturing process

Consumption Tax
This is any tax on the purchase of goods and services. Sales taxes, excise taxes and tariffs are all consumption taxes. They are taxes on what you spend, rather than taxes on what you earn

Tax Exempt
Income or transactions that aren’t subject to any federal, state, or local tax are tax exempt. Some religious and charitable organizations are also tax exempt. So are earnings from municipal bonds.

TAX POLICY

Tax Policy develops and implements tax policies and programs; reviews regulations and rulings to administer the Internal Revenue Code, negotiates tax treaties, provides economic and legal policy analysis for domestic and international tax policy decisions. It also provides estimates for the President’s budget, fiscal policy decisions, and cash management decisions.
The Office of Tax Policy assists the Secretary and is responsible for developing and implementing tax policies and programs; providing the official estimates of all Government receipts for the President’s budget, fiscal policy decisions, and Treasury cash management decisions; establishing policy criteria reflected in regulations and rulings and guiding their preparation with the Internal Revenue Service; negotiating tax treaties for the United States and representing the United States in meetings and work of multilateral organizations dealing with tax policy matters; and providing economic and legal policy analysis for domestic and international tax policy decisions.

ORGANIZATION
The Assistant Secretary (Tax Policy) is the senior advisor to the Secretary of the Treasury for analyzing, developing, and implementing Federal tax policies and programs.  In addition to the Assistant Secretary, the Immediate Office of the Assistant Secretary includes the Deputy Assistant Secretaries for Tax Policy, for Tax Analysis, for International Tax Affairs, for Multilateral Negotiations, and for Tax, Trade and Tariff Policy; and a staff of assistants and advisors.
The Assistant Secretary (Tax Policy) and Deputies oversee the cooperative activities of the Office of the Tax Legislative Counsel, the Office of the International Tax Counsel, the Office of the Benefits Tax Counsel, and the Office of Tax Analysis.  Additional information about these Offices can be found by clicking on each title.  (To learn more about Tax Policy Resources, scroll down)

Key Personnel
* Lily Batchelder, Assistant Secretary (Tax Policy), directs the Office of Tax Policy in developing, recommending, and implementing Federal tax policy on behalf of the Department. The Immediate Office includes the following individuals and their staffs.
* Tom West, Deputy Assistant Secretary (Tax Policy), provides advice and counsel to the Assistant Secretary related to tax policy and coordinates domestic administrative guidance projects.
* Gregory Leiserson, Deputy Assistant Secretary (Tax Analysis), provides advice and economic analysis to the Assistant Secretary and oversees the work of the Office of Tax Analysis.
* Itai Grinberg, Deputy Assistant Secretary (Multilateral Tax), provides advice and counsel to the Assistant Secretary related to international tax policy and officially represents the Administration’s interests in international settings.
* Aruna Kalyanam, Deputy Assistant Secretary (Legislative Affairs, Tax and Budget), provides advice and counsel to the Assistant Secretary on tax and budget legislation.
* Rebecca Kysar, Counselor to the Assistant Secretary (Tax Policy), provides advice and counsel to the Assistant Secretary
* Natasha Sarin, Counselor to the Assistant Secretary (Tax Policy and Implementation), provides advice and counsel to the Assistant Secretary 
* José Murillo, Deputy Assistant Secretary (International Tax Affairs), provides advice and counsel to the Assistant Secretary related to international tax policy and tax treaties and coordinates international administrative guidance projects.
* Deputy Assistant Secretary (Tax, Trade and Tariff Policy), provides policy oversight for the Alcohol and Tobacco Tax and Trade Bureau and for issues regarding the Department’s Customs

TAX POLICY RESOURCES

This web page describes the Office and its responsibilities.  A second Tax Policy webpage is in the Policy Issues section of the Treasury website.  It contains links to papers, tables, reports, and other documents of interest including work by the economists in the Office of Tax Analysis.
* the Policy Issues page for the Office of Tax Policy is here. 
* this page includes links to Revenue Proposals, Tax Expenditures, International Tax Documents, Reports, and more.
* the Policy Issues page for the Office of Tax Analysis (economists) is here.
* this includes links to Distribution Analyses, the Analyses of Key Provisions and Proposals including the Child Credit Advance, OTA Working Papers, and more.
CONTACT
Assistant Secretary (Tax Policy)Department of the Treasury1500 Pennsylvania Ave., NW, Room 3120Washington, DC  20220
Office of the Tax Legislative Counsel, Room 3044Office of the International Tax Counsel, Room 3058Office of the Benefits Tax Counsel, Room 3044Office of Tax Analysis Room 4116
All press inquiries should be directed here.