National insurance contributions

Taxation in the United Kingdom may involve payments to a minimum of two different levels of government: the central government (Her Majesty's Revenue and Customs) and local government. Central government revenues come primarily from income tax, National Insurance contributions, value added tax, corporation tax and fuel duty. Local government revenues come primarily from grants from central government funds, business rates in England and Wales, Council Tax and increasingly from fees and charges such as those from on-street parking. In the fiscal year 2007-08, total government revenue was 39.2 per cent of GDP, with net taxes and National Insurance contributions standing at 36.9 per cent of GDP.

The second largest source of government revenues is National Insurance contributions (NIC), payable by employees, employers and the self-employed. Unlike income tax, Class 1 (non self-employed persons) NIC is paid between lower and upper thresholds, or between £105 and £770 per week for 2008-09. A zero rate of NIC applies to earnings between the lower earnings limit of £90 per week and the earnings threshold of £105 per week (in 2008-09) to protect employees' contributory benefit entitlements. National Insurance is levied at 11% (that is, 11p in the £), but can be contracted-out for persons with a qualifying pension scheme with a reduction of 1.6%. There has also been the addition of a 1% rate on income above the upper threshold in recent years. Employers pay an additional 12.8% on earnings over the lower earnings threshold (£105 per week), but without the upper threshold, so total earnings are taxed at 12.8% per employee.

Employers are additionally liable to Class 1A NIC at 12.8% on most benefits-in-kind provided to employees which are subject to income tax in the hands of the employee, and to Class 1B NIC (also at 12.8%) on the value of the tax and on certain benefits paid via a "PAYE Settlement Agreement".

There are also separate arrangements for self-employed persons (who are normally liable to Class 2 flat rate NIC and Class 4 earnings-related NIC), married women, and voluntary sector workers.

The third largest source of government revenues is value added tax (VAT), charged at the standard rate of 17.5% (temporarily cut to 15% between December 2008 and December 2009) on supplies of goods and services.

Economic policies of the united states

Since the 1980s, the U.S. has increased the use of neoliberal economic policies that reduce government intervention and reduce the size of the welfare state, backing away from the more interventionist Keynsian economic policies that had been in favor since the Great Depression. As a result, the United States provides fewer government-delivered social welfare services than most industrialized nations, choosing instead to keep its tax burden lower and relying more heavily on the free market and private charities.

The United States's minimum wage is among the lowest in the industrialized world relative to similar per capita economies. Beginning in the latter part of the 20th century this led to a "living wage" movement; this has met success primarily in urban centers, along with a minority of states that have passed legislation increasing wages. When adjusted for inflation median wages in some states have decreased since 1979.

This pared with tax structures found in some areas, such as Utah, where the poor pay more of their income as a total percentage on taxes, i.e. those making below $16,000 annually pay 11.4% of their income on taxes while those earning at least $280,000 pay 5.5% (because citizens reach the top tax bracket at $4,313 for a single person), has led to growing number of poor and a wider gap between the rich. Tax systems constructed along these lines have been called "regressive".

Nationally, as of 2005, the top federal tax bracket for a single person is 35% and reached at an income of $326,451. When compared to other countries, especially in Europe, America's economy has a high level of social inequality.

The United States is said to have a mixed economy because privately owned businesses and government both play important roles. Indeed, some of the most enduring debates of American economic history focus on the relative roles of the public and private sectors.

The American free enterprise system emphasizes private ownership. Private businesses produce most goods and services, and almost two-thirds of the nation's total economic output goes to individuals for personal use (the remaining one-third is bought by government and business). The consumer role is so great, in fact, that the nation is sometimes characterized as having a "consumer economy."