Notes

authority The power and/or right to enforce obedience and make decisions over a group.
commerce The business and exchange of goods by purchase, trade, or sale.
federal Government formed by a union of smaller groups (states) in agreement.
government A system of authority over a group of people.
import Goods brought into a country or state for the purpose of trade.
intangible That cannot be felt by touching, immaterial.
license Authorization by law.
regulate To control, adjust or govern according to a system.
tangible That can be felt by touching, material.
tariff Systems of taxes placed on imports or exports of a country.
utilities A service to the public such as gas, telephone, water, or electric power.
Local governments help in tangible ways with creation of mass transportation, libraries, local parks, and town streets.
State governments help tangibly by creating state parks and recreation areas, and maintaining public utilities. You see your state tax dollars at work whenever you see the construction crews working on a new lane or constructing a rest stop on the state highway. Intangibly, they license and oversee businesses and occupations. Very few people would trust a dentist who did not have his state license, giving him permission to practice in the state. Likewise, few people would trust a lawyer whose state license was revoked
Federal governments work for the good of the country as a whole. We see tangible evidence of the government at work whenever we see a coin or dollar bill. We see our armed forces and know that the government is obligated to our safety. We receive mail and read of tariffs on imports and we know that the government works to regulate and maintain the mail system and commerce for the benefit of all the country's citizens.
The government must have funds or revenue to pay for all these services. They raise revenue in many ways, such as, charging you an entrance fee to one of the national parks. Most of the revenue comes from the following sources:

Income taxes are placed on an individual's income. About half of the total local, state, and federal revenue comes from this source.
One common form of capital tax is paid by businesses that generate a profit. Another example of this kind of tax is property tax on houses and boats.
Sales tax is a tax you pay when you purchase items. It is usually a percentage of the total price.
Excise tax is levied on a specific product such as alcohol, cigarettes, and gasoline.
There are three types of income tax: Progressive, regressive, and proportional.

In a progressive tax system, the tax rate or the proportion of earnings taken out in taxes is greater for higher incomes. Greater demands are placed on those who earn the most, and proportionally fewer demands on those who earn less. The United States, Canada and many countries have progressive federal income tax systems.
In a regressive tax system, people who earn less pay a larger part of their income in taxes than people who earn more. A person earning $20,000 per year might pay $2,000 per year in taxes or ten percent of their income. A person earning $100,000 per year might pay $8,000 in taxes, which is 8 percent of their income. Although the person earning more pays more in taxes, the tax is actually a smaller portion of their total income.
In a proportional tax system, all people pay the same percentage of their earnings in taxes. This is also known as a "flat" tax system.