What is the term for the tax payable on income, including wages and investments, to federal and state governments?

The correct term for the tax payable on income, including wages and investments, to federal and state governments is income tax. This type of tax is calculated based on the earnings of individuals and entities, ensuring that a percentage of their income is contributed to government funding for various public services and programs.

Income tax is typically progressive, meaning that the rate increases as the amount of taxable income rises, which is designed to distribute the tax burden more equitably among taxpayers. This system allows for government revenue to be collected in a way that takes into account the differing financial capabilities of individuals and businesses.

In contrast, sales tax is levied on the sale of goods and services, property tax is assessed on real estate based on its value, and capital gains tax applies to the profit made from the sale of assets or investments. Each of these taxes serves a different purpose and operates under different rules and structures than income tax.