The difference between an income tax and a payroll tax is as follows:
1. Income taxes are used for a wide variety of government activities, such as funding public services like education, healthcare, defense, and infrastructure. On the other hand, payroll taxes specifically fund programs like Social Security, Medicare, and unemployment benefits.
2. Income taxes are collected based on the income an individual earns from sources like wages, investments, and businesses. In contrast, payroll taxes are collected based on an individual's wages or salary and are typically withheld by employers to fund specific social programs.
In summary, income taxes are more general in their usage and based on overall income, while payroll taxes are more specific, funding particular programs and collected based on wages or salary.
