The most common kind of tax that the IRS collects is personal income tax, which is figured as a percentage of the money an individual earns from employment and investments. This percentage is calculated according to a progressive tax scale, meaning that the more you earn, the higher a percentage you pay. For example, if an individual earns $20,000 per year, he or she pays a smaller percentage of that income in taxes than a person who earns $200,000 per year.