Tax law is divided into both federal tax and state tax. The federal government and the state governments each have a tax laws that are independent, and in some cases, different from one another. The more assets that an individual owns, the more complicated the tax law becomes. A tax base is the difference between a person's taxable income for the year and the person's deductions. A person may choose to itemize their deductions or take the standard deduction that is provided by the federal or state government.
Tax rates are mathematical tables that determine the amount of tax that an individual owes.
Tax rates are based on income. The higher an individual's income, the higher the tax rate. Income is defined as the realization of gain. This sounds complicated, but it's really not. Anytime that you receive money, be it a paycheck or the selling of your house, you have realized a gain.