 There are many different types of taxes, many different ways to tax and throughout human history governments have applied just about every general category of taxation that we know about and therefore with regards to tax, there's nothing really new under the sun at this point in time. We're not coming up with grand new tax schemes at this point but rather we're basically just tweaking adjusting tax schemes that we have seen throughout history. This course is focused on the United States income tax, the primary tax system funding the federal government. It's an income tax system, therefore the tax is being applied as we earn the money. We can compare that to another system often used in democratic republics at this point in time and that's going to be the sales or usage tax system where the tax is then being applied when a purchase is being made. So because those are kind of like the primary tax systems used in democratic republics it's useful to try to categorize the characteristics of those primary tax systems. Now in the United States we have the federal income tax system that blankets the whole country and then we have the states which have the sovereignty to choose their own tax systems. Many states mirror the federal income tax system so therefore the states will have a similar income tax system and we can apply many of the rules on the federal tax system to the state because they're going to be mirroring the federal tax system generally. However some states might deviate from that and be using more of a sales tax or usage tax type of system in order to fund the state needs. So in that case of course people would have still to pay the federal income tax and deal with an income tax system and then you've got a state tax that's going to be applied on the local level. One of the great things about the United States is the ability to have the states to be sovereign to do their own kind of taxation on a local level so that we can do some experimentation. We can we can see about how are those states doing is the taxation part of the justification or reasons for any kind of differentiations between states and those are the kind of like testing grounds. So as we think about different types of taxes we could try to categorize them in terminology that you will often hear are a flat or proportional type of tax a progressive tax and a regressive tax. So these are terms that often come up whenever you see someone that's going to change the tax law so we might be talking about something that we already have a federal income tax system and they're trying to put a new law in it to do something or the other whatever they're trying to do and you will start to hear this language such as well they're trying to flatten out the tax code or they're making the tax more progressive or less progressive or the tax code is being regressive or if you're trying to compare a sales tax or usage tax system to an income tax system people will often use these terms. Now again whenever you hear these kind of debates about taxation then you've got to be careful because people are going to try to use absolute terminology when usually things are much more complex and nuanced than to use that absolute terminology. So when you hear like a flat tax people are often thinking that you have just one tax rate so like you like you give 10 percent to charity is a gent like a gent that's kind of like a flat tax if you were to apply that rule if you're going to say I'm just going to say 10 percent is going to be coming out of your income that's a flat tax. If we have a progressive tax that means that we generally have a tiered tax system so people wealthier people generally are going to be taxed more in a progressive kind of tax system. So in the United States we're you know quite proud often people are proud of the progressive tax system because it's taxing people more on the higher income side of things and note that again there's debate already on that because the flat tax also taxes people more as people's income goes up because 10 percent of 100,000 is more than 10 percent of 10,000 but with a progressive tax now you've got a tiered structure where the rates are actually going up as the dollar amount goes up but note that these two aren't necessarily absolute differences it's not like you could say well you have a flat tax or a progressive tax we have we have a progressive tax because we have multiple tiers but you can imagine things being more or less progressive meaning do you have more tiers more layers of taxation or is the top layer of tax really high if like if you're taxing someone that makes a lot of money like a hundred percent at the top level you could say that would be more progressive or less or less or less flat so you can use this terminology to kind of not be just a static thing but basically more or less and then regressive is often a term that's going to be used to kind of downplay a tax so a politician that doesn't like whatever tax policy that's being applied is going to call the tax policy regressive which would indicate that the people on the low end side of things are going to be bearing more of the brunt of the taxes