Income tax in the United States These treaties reduce the chance of double taxation by allowing each country to fully tax its citizens and residents and reducing the amount the other country can tax them. Generally the treaties provide for reduced rates of tax on investment income and limits as to which business income can be taxed. The treaties each define which taxpayers can benefit from the treaty. The United States social insurance system is funded by a tax similar to an income tax. Social Security tax of 6.2% is imposed on wages paid to employees. The tax is imposed on both the employer and the
Hall income tax there were bills to raise state government revenue by reducing the fraction of the Hall tax that is distributed to local governments. The proposals for major changes to the Hall tax failed because of the lack of alternative sources of revenue. The Hall tax is Tennessee's only tax on personal income; the state does not levy a general personal income tax. As of 1974, the Tennessee Supreme Court had consistently held that the state constitution authorized only three types of taxes: privilege taxes, "ad valorem" property taxes, and a tax on income from interest and dividends. In decisions in 1932