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Taxes can be federal, state, or local. They’re used to pay for government programs, resources, and services. Public services such as libraries, schools, Social Security, and infrastructure are paid for with taxes.
Americans can be taxed a couple different ways. Individual income taxes are collected on your wages, investments, or other types of earned income. Taxes are also collected on goods and services you buy. One of the most common types of taxes you may have encountered on things you buy is sales tax. The final category of taxes is on things you own, such as property taxes.