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Taxes

Taxes. Chapter 11. Federal, State & Local Taxes. Federal Income Taxes Social Security Taxes Medicare Taxes State Income Taxes Sales Tax Excise Tax Property Taxes Local Taxes. Types of Taxes. Progressive Tax- As income ↑ => Average Tax Rate ↑ Example: U.S. Federal Income Tax

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Taxes

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  1. Taxes Chapter 11

  2. Federal, State & Local Taxes Federal Income Taxes Social Security Taxes Medicare Taxes State Income Taxes Sales Tax Excise Tax Property Taxes Local Taxes

  3. Types of Taxes • Progressive Tax- • As income ↑ => Average Tax Rate ↑ • Example:U.S. Federal Income Tax • Regressive Tax- • As income ↑ => Average Tax Rate ↓ • Example:Gasoline Tax, Bridge Tax • Proportional Tax • Regardless of income level => Average Tax Rate unchanged • Example: Flat Income Tax, Corporate Taxes • Excise Tax • Flat rate per unit => paid at purchase • Example: Gasoline ($0.50 per gallon), cigarettes • (both are also regressive taxes) Tax Incidence: who pays most?

  4. Excise Taxes Plus $1.01 per pack Federal Tax!

  5. Tax Reading

  6. 2014 California Income Tax Table 2013 - 2014

  7. Bush Tax cuts are now permanent New top bracket

  8. 2 Wage Earners Mary earns $60,000 John earns $500,000 $5,855 $2,520 $870 $1,617 $49,137 $4,094 $10,863 18.0% Federal Taxes Social Security Medicare California Tax Yearly Bring Home Pay Monthly Bring Home Pay Total Taxes Paid Overall Tax % Rate $151,026 $7,254 $9,995 $52,830 $277,922 $23,160 $222,078 44.0% http://www.paycheckcity.com/calculator/netpay/us/california/calculator.html

  9. Who Pays Federal Income Taxes • Top 1% of Taxpayers • Pay 38% of all taxes • Earn 20% of all income • 1.4 million households • $343,000 + Up • Top 10% of Taxpayers • Pay 70% of all income taxes • Earn 46% of income • Bottom 50%of Taxpayers • Pay 3% of Income Taxes • Earn 13% of Income • Below $33,000 ($16/hour working full time)

  10. . Top 1% pay more taxes BUT The income Gap has widened last 30-Years

  11. Top 1% versus Top 0.1% • Top 1%: • Income: Over $350,000 per year • 1.5 million households • Top 0.1%: • Income: $1.4 million per year • Only 146,000 households

  12. Winner Take All Society?

  13. Winner Take All:Superstar Theory Why Now?

  14. Falling Income of Low-Skilled Low-Skilled Workers Highly Educated Workers S S D D What is good about inequality?

  15. Basic Income • http://www.pbs.org/newshour/making-sense/why-americas-favorite-anarchist-thinks-most-american-workers-are-slaves/

  16. Death of Middle Class? • http://www.pbs.org/newshour/bb/business/july-dec12/makingsense_10-16.html

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