What is Income tax?
Taxes that are based on how much money a person earns are called '''income taxes'''. There are many other sorts of [[tax]]es on [[Business|businesses]] and [[property]]. Now most countries have some sort of income tax. It is usually only for people who live in the country. How it is done varies a great deal both between countries and over time. Income tax can only work in a [[money economy]], with reasonably accurate [[Accounting|accounts]] and in an orderly society with reliable records. Income tax is generally worked out a [[percentage]] of a persons [[income]]. There may be an amount of income which is not taxed. The rate may be higher for people who have income above a set amount. It is usually worked out on a [[Year|yearly]] basis. For people who are [[Employee|employed]] the income tax is generally taken out of their pay by their [[employer]] who pays it to the [[government]]. People who run their own business have to produce accounts. == History == [[File:The_stratagem_alias_the_French_bug-a-bo_or_Iohn_Bull_turn%27d_scrub_%28BM_1868,0808.6811%29.jpg|thumb|upright=0.9|right|[[William Pitt the Younger]] introduced a progressive income tax in 1798.]] The first modern income tax was started in 1799<ref>{{cite book|title=Income tax in common law jurisdictions: from the origins to 1820, Volume 1|last=Harris|first=Peter|year=2006|page=1|isbn=9780521870832|url=https://books.google.com/books?id=HYvfTdbdkg4C&pg=PA1}}</ref> in [[Kingdom of Great Britain|Great Britain]] by [[Prime Minister]] [[William Pitt the Younger]] in his budget of December 1798, to pay for weapons and equipment for the [[French Revolutionary Wars|French Revolutionary War]]. Pitt's income tax began at 2 old [[Penny|pence]] in the [[Pound Sterling|pound]] ({{frac|1|120}}) on incomes over £60 (worth about £5,500 in {{Inflation/year|UK-GDP}}),{{Inflation/fn|UK}} up to 2 [[shilling]]s in the pound (10%) on incomes of over £200. Pitt hoped that the new income tax would raise £10 million a year, but in1799 it only raised a little over