Why are there so many deductions on this paycheck?!

Taxes!

In 2011, federal, state and local governments collected a combined total of $3.77 trillion in taxes or an average of $31,774 for every household in the U.S.!

Its the LAW!!

Article 1, Section 8, Clause 1!
The Congress shall have Power To lay and collect Taxes, Duties, Imposts and Excises, to pay the Debts and provide for the common Defense and general Welfare of the United States; but all Duties, Imposts and Excises shall be uniform throughout the United States!

To steal from one person is theft. To steal from many is taxation ! ! ! ! ! !-Daill s Law! ! ! Serfs in the Middle Ages had to give up 20% of their yearly income and that made them virtual slaves. Today the average American pays 47%. What does that make Americans? ! ! ! ! ! !-Kenneth Prazak! ! American workers spend more of their day working to pay taxes than they do to feed, clothe, and house their families ! ! ! ! ! !-The Tax Foundation! ! There are two things that are certain in life, death and taxes ! ! ! ! ! !-Unknown! ! Man is not like other animals in the ways that are really signicant: animals have instincts, we have taxes.! ! ! ! ! !-Erving Goffman! ! A person doesnt know how much he has to be thankful for until he has to pay taxes on it.! ! ! ! ! !-Unknown!

Awesome Tax Quotes!

Look at this trend!!!!

!Government services that are paid for by taxation!

Income Securities!

Misc.!

For every $100!

Medical!

Running Govt.!

Country & Neighborhood Defense!

Education!

Ability to pay theory!

!Those who can afford to pay more taxes should carry more of the burden of taxation!
! ! ! ! !Annual Salary! !50 million ! !1 million! !45 thousand!

Example:! ! ! ! ! Tiger Woods! ! Doctor ! ! Construction worker !

Who should pay more tax?!

Benets received theory!

!Those who directly benet from the services provided by the taxation should pay the tax.! !
Example:! ! Gas tax= revenue goes directly to roads and auto related issues! ! !

Three Tax Structures!

1.! Proportional- Flat tax ! !Same percent paid in taxes regardless of income level! !! ! !Annual salary ! !tax rate! Miss Dang !60k ! ! ! !32%! Bill Gates !100 million ! !32%! Brad Pitt !10 million ! !32% !!

2. Progressive! !The more money you make, the higher percent paid in taxes! ! ! ! ! !annual salary ! !tax
rate!

Miss Dang ! !60k ! ! Mr. Gorsage ! !85k ! ! Principal Crosby !110k ! ! Pete Carroll! !2 million !

! ! ! !

!25%! !28%! !28%! !35%!

3. Regressive! imposes a higher percentage rate of taxation on low incomes than on high incomes.! !
Example: sales tax! 7.75% sales tax on $5,000 on food & clothing! 7.75% sales tax on $20,000 on food & clothing! ! ! ! !annual salary !Tax paid ! !%! Person 1 !10,000 ! !$387.50 ! !3.8%! Person 2 !100,000 ! !$1,550.00! !1.5%!

Figure 9.3

Personal Opinion?!
Which tax structure do you think is most equitable (fair) and why?! ! Proportional! ! ! ! ! ! ! !Progressive! ! ! !LETS ! ! ARGUE!!! !! !

Where the government gets its money!

Four Tax Bases"

1.! Individual Income Tax-! !16th Amendment (1913)! ! !-State! ! !-Federal! ! !-FICA !
! ! !-Social Security! !-Medicare!

2. Sales Tax! !-% tax on purchase of goods! !-varies by county!

!

!In

! !

the Sales and Use Tax Law, the sale or use of certain tangible personal property is exempt from both sales and use tax. Examples include cold food products and prescription medicines. !

3. Property Tax ! !-% on each property owner! !-paid annually! !-varies by city!

4. Corporate Income Tax! !-corporations, like individuals, pay income tax on their earnings! ! !-State! ! !-Federal!

Other taxes!
1.! Estate Tax= placed on estates over 600K (can exceed 55%)! ! 2. Gift Tax= you can give 10,000 per year tax free! ! 3. Import Tax /Tariff! !