Question

Select a tax that exists somewhere in the world and give a very brief description of the tax.

Answer 1

Social Security Tax in the US

The Social Security tax, also known as Old Age, Survivors, and Disability Insurance (OASDI), refers to all earned labor income. If you work it's pretty much unavoidable to pay. The social security tax is paid by both employers and self-employed taxpayers.

Social Security works much like a flat tax. Everyone pays the same rate, no matter how much they earn, until it hits the ceiling. As of 2020, all wages and self-employment income earned by a worker up to a maximum dollar limit of $137,700 will receive a single rate of 12.4 per cent. The employee pays half of this tax through payroll withholding. The Employer pays the other half. Employees thus pay 6.2% of their wage earnings to the maximum wage base and employers also pay 6.2% of their employee's wage earnings to the maximum wage base, for a total of 12.4%

You pay income taxes are deposited into the U.S. general fund. They can be used for any purpose, but there are different social security taxes. Such taxes are paid into special trust accounts that can only be used to support present and potential retirement payments for the Social Security as well as medical insurance and pensions for widows and widows. Today's employees pay a amount, which in effect is charged to the survivors of today those employees who have retired and are now receiving compensation from the Social Security. When the employees of today retire, they will tap into the benefits that the employees of tomorrow will be paying.