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Taxes Do Now: If Americans stopped paying taxes, what do you think would happen?

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Presentation on theme: "Taxes Do Now: If Americans stopped paying taxes, what do you think would happen?"— Presentation transcript:

1 Taxes Do Now: If Americans stopped paying taxes, what do you think would happen?

2 Taxes Three different types of major federal taxes: Personal Income Tax Corporate Income Tax Social Security Tax

3 Types of Federal Taxes – 2010 Revenue Personal Income Tax – 984 Billion Corporate Income Tax – 199 Billion Social Security Tax – 906 Billion Other – 175 Billion

4 Graph – Tax Revenues by % (2008)

5 State/Local Taxes Sales Taxes – Cars, computers, clothes, books. State governments typically raise revenues through sales taxes. Taxes are placed on goods at the point of service/sale. State Income Tax Property Taxes – Paid to your local city or town.

6 Excise Taxes Excise Taxes – Taxes placed on goods such as tobacco and gasoline. Taxes are already built into the price. Can be state or federal.

7 Forms of Payment Annual Tax Returns: (Federal Income, Corporate and Social Security Taxes) (State Income Tax) Upon Purchase – (Sales taxes)

8 Progressive Income Tax People pay at a higher rate as their income rises. It is usually capped at a certain tax rate. In America, for instance, no one pays higher than 35 percent of their income.

9 2011 U.S. Tax Brackets » Single Married/Filing Jointly Head of Household 10% Bracket$0 – $8,500$0 – $17,000$0 – $12,150 15% Bracket$8,500 – $34,500$17,000 – $69,000 $12,150 – $46,250 25% Bracket$34,500 – $83,600$69,000 – $139,350 $46,250 – $119,400 28% Bracket$83,600 – $174,400$139,350 – $212,300$119,400 – $193,350 33% Bracket$174,400 – $379,150$212,300 – $379,150$193,350 – $379,150 35% Bracket$379,150+$379,150+$379,150+

10 Economics – 11/17/11 Aim – Is the current tax system in America a fair one? Do Now – Based on your overall knowledge of economics, does America have a fair tax system?

11 Proportional Tax Rate An income tax that everyone pays at the same rate, whatever the income. Also called a flat tax Russia – 13%, Serbia – 14%, Romania – 16%

12 Taxes – Fair Share? Top 1 % - Earning above 410,000 – Pay 40 % Top 10 % - Earning above 113,000 – Pay 60 % Top 25 % - Earning above 66,000 – Pay 86 % Top 50 % - Earning above 32,000 – Pay 97 % Bottom 50 % - Earning below 32,000 – Pay 3 % Do the wealthy appear to be paying their fair share? Why or why not?

13 Tax Refund Loans These types of loans are a bad idea unless you need the money for an emergency Fees associated with the lender are often very high. Sometimes called Refund Anticipation Loans APR can get as high as 250 percent

14 Fair Debt Collection Practices Act Hours for phone contact: only allowed between 8:00 a.m. to 9:00 p.m. local time Failure to cease communication upon request Causing a telephone to ring or engaging any person in telephone conversation repeatedly or continuously: with intent to annoy, abuse, or harass any person at the called number. Communicating with consumers at their place of employment after being advised that this is unacceptable or prohibited by the employers Misrepresenting the debt or using deception to collect the debt, including a debt collector's misrepresentation that he or she is an attorney or law enforcement officer

15 Closing Credit Cards/Debit Cards Call and notify the company you are closing. Or notify them in writing that you are closing the card Cut up the credit card Dispose of the card parts in different garbage bags

16 FHA Loans The Federal Housing Administration Insures lenders that make mortgage loans to low income buyers/or people with low credit scores Home buyers have to meet income guidelines to qualify Goal is to encourage home ownership while also helping to protect lenders

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