When you get your paycheck at the end of the first pay period at a new job, it's always interesting to see your net pay. Most of us expect more than we get. By the time you get your check, it has been cut up like a pizza, with several entities taking a piece of the pie. The entities that take money differ from person to person, company to company and state to state. However, almost every income earner has to pay federal income tax.
We generally don't think much about taxes except during the annual tax season. It's probably the most dreaded time of the year for millions of Americans, yet we circle it on our calendars along with holidays and birthdays. But little joy is connected to April 15, which is the deadline for filing tax forms. (This deadline doesn't always fall on the 15th. For example, in 2001, April 15 fell on a Sunday, so Americans got an automatic one-day extension on tax-filing.)
The American tax system is a huge machine with a tax code that seems more complex than rocket science. In this edition of HowStuffWorks, we will examine how individual income taxes work, take a look at the history of income taxes in the United States and consider two alternative tax plans that are often discussed.