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TAXES. “Taxes are what we pay for civilized society” Oliver Wendell Holmes Jr., 1904. Essential Questions. Are taxes necessary in society? How does the government collect taxes from its citizens? How do taxes impact our lives
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Are taxes necessary in society?
How does the government collect taxes from its citizens?
How do taxes impact our lives
(Tax, income tax, sales tax, property tax, W-2, W-4, I-9, 1040 EZ,
IRS, tax bracket, payroll deductions, tax evasion, tax avoidance,
tax deductible, tax credit, dependent, allowance)
Used to provide public goods and services.
Sales Tax: Tax on sale of items - (regressive)
Income Tax: Tax on earnings - (progressive)
Property Tax: Tax on property (Ex. land, cars)
Capital Gains Tax: Tax on sale of assets (Ex. stocks)
Gift Tax: Tax collected on money/property valued over $11,000
Estate Tax: Fed. tax on value of someone’s property upon death
Internal Revenue Service (IRS): Collects federal taxes
Enforces tax laws written by US Congress.
Surplus to Pay Down
Law Enforcement and General Government
Social Security, Medicare and
Where it comes from
Excise, customs, estate, gift, and miscellaneous Taxes
Health Care for Elderly
State and Local Police
A sales tax is a tax, usually paid by the consumer at the point of purchase for certain goods and services. % of value
* Dif. states & cities have different tax rates that vary depending on item
Excise Tax: applied to select group of products like gas
Alcohol & tobacco (sin tax)
1. Complete a W-4 Form (Employee’s Withholding Allowance Certificate)
(allowances or dependents allow you to keep more of your money = pay less tax)
Dependent:Person who relies on the taxpayer for financial support
2. Complete an I-9 Form (Employment Eligibility Verification)
How often you are paid?
Pay Period :
Weekly: 52 per year
Bi-weekly: 26 per year
Semi-Monthly: 24 per year
Monthly: 12 per year
Standard workday: 8 hours
Standard work week: 40 hours.
About 1/3rd of more of your paycheck will go to taxes
Taxes are immediately paid on income earned
Tax Avoidance: Legal means of decreasing your tax bill
Tax Evasion: Failure to pay legally due taxes
subject to tax
Part of income
that isn’t taxed
Dollar for dollar
reduction in tax