Search Investopedia

Surtax

Filed Under » ,
Dictionary Says

Definition of 'Surtax'

A tax levied on top of another tax. A surtax can be calculated as a percentage of a certain amount or it can be a flat dollar amount. A surtax is generally assessed to fund a specific government program, whereas regular income or sales taxes are used to fund a variety of programs. Thus, one unique feature of a surtax is that it allows taxpayers to more easily see how much money the government is collecting and spending for a particular program.
Investopedia Says

Investopedia explains 'Surtax'

For example, in 1968, President Johnson enacted a 10% surtax on individual and corporate income to help pay for the cost of fighting the Vietnam War. While most taxpayers probably did not know what percentage of their tax dollars were going toward military spending, they could easily see how much extra money they were being asked to contribute specifically to the war effort.

Related Definitions

  •

    Income Tax

    A tax that governments impose on financial income generated by all entities within their jurisdiction. By law, businesses and individuals must file an income tax return every year to ...
    Read More »

  • Self-Employment Tax

    A tax imposed on self-employed people, who must pay this tax in order to receive social-security benefits upon retirement.
    Read More »

  • Corporate Tax

    A levy placed on the profit of a firm with different rates are used for different levels of profits. Corporate taxes are taxes against profits earned by businesses during a given taxable ...
    Read More »

    • Direct Tax

      A tax that is paid directly by an individual or organization to the imposing entity. A taxpayer pays a direct tax to a government for different purposes, including real property tax, ...
      Read More »

    • Indirect Tax

      A tax that increases the price of a good so that consumers are actually paying the tax by paying more for the products.
      Read More »

    • Surcharge

      A fee or other charge that is added to the cost of a good or service. A surcharge is typically added to an existing tax, and may not be included in the stated price of a good or service. ...
      Read More »

Articles Of Interest

Sponsored links
Hot Definitions
Partner Links
Suggested Definitions