Tax

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Tax is money that is taken from individuals (and from companies) in many different ways in order to pay for all the services provided by the government - federal government, state government, and local government (county and city). Probably the most significant tax an individual will pay is income tax to the federal government. Many states also levy state income tax. Other taxes an individual will usually have to pay at some point are: sales tax when you buy certain things; property tax if you own property; capital gains tax when you sell investments at a profit; gift tax on certain gifts; and estate tax that may be charged to your estate when you die. Dividend income from stocks, coupon payments from many bonds, and other forms of interest, such as income from certificates of deposit and certain bank accounts, are all generally taxable income. To get an idea of the extent and complexity of tax, consider this statistic: the 2008 federal tax code, which describes how federal taxes work, contained over 60,000 pages.