Economies depend heavily on the efficiency and performance e of their tax system. If you are a student of economics you must be aware that the department of excise and taxation holds key position in every Government. This is why it is very important to employee dedicated people to work in this department. The entire government expenditure is financed by these taxes. In the underdeveloped and the developing countries tax system is not transparent and efficient. It is astonishing that most rich people from these regions make every attempt to avoid taxes while the poor end up paying most. The system need to be reformed for these countries. On the other hand tax system in developed countries is efficient and transparent. A general awareness is present amongst the people and they are aware of their rights. This is a major difference between the underdeveloped and the developed societies.

People in developed societies exercise their right to raise question on the tax system while in the other part of the world this act is unthinkable and is never practiced at all. Another thing to remember is that there are various types of taxes levied upon the users. These taxes vary on different aspect and services provided to the customer. However, one of the major differences is the collection of these taxes. There are certain taxes that are collected by the federal government while many are collected by States. Federal Payroll Taxes are one of the most important type of taxes in the tax system today. Basically they are taxes which can be divided into two types. First of all an employer is bound to deduct some part of the employee's salary for Federal Payroll Taxes. This is an important contract that both the employee and the employee agree upon. Another important aspect is that this tax is always a percentage of the total salary of the employee. This tax is deducted before giving the pay and is then submitted to the tax authorities by the employee. Thus it can be said that the employee has the responsibility to submit Federal Payroll Taxes to the tax authorities.

The other type of Federal Payroll Taxes is that the employer has to pay a certain amount of tax from his pocket for every employee he hires. This is also submitted to the tax authorities on yearly or monthly basis depending upon the tax system requirements.