Paying for the Government 18.2

Marzano terms 15 minutes to get these in your folder Proportional Tax Progressive Tax Regressive Tax Direct Tax Indirect Tax

Main Idea Federal, state and local gov’ts tax citizens directly and indirectly … Federal, state and local gov’ts tax citizens directly and indirectly …

Paying for the Gov’t (491) What’s the story of Erin?

Tax Fairness Goods & Services expectationGoods & Services expectation Complain about taxes?Complain about taxes? Unfair, too much, income, sales, property …Unfair, too much, income, sales, property …

Characteristics of a Good Tax Duty of all to understand fair tax and now, The big 5 1.Efficient and economical – not spend too much to collect and process 2.Gov’t to provide a good reason for the tax 3.Tax MUST treat all fairly 4.Must be certain 5.Simple and convenient

Analyze Diagram Page 492 Copy the diagram in your notebook Answer 1 & 2

Benefits-Received Principle Fairness Should benefit those who pay the tax! e.g., Gasoline tax the more you drive, the more you pay, The more benefits received …

Gas tax …

Ability to pay principle Taxes to be paid on ability Related to income TAX = $1, Nelson makes $100, Neumann makes $50, Is the tax fair?

Reading Check? Who receives the benefits of a fair tax? Who receives the benefits of a fair tax?

Answer … Those who pay the taxes should receive the benefits! read : Types of Income Taxes on pages read : Types of Income Taxes on pages

Types of Income Taxes (according to the ability to pay principle) Proportional Tax – requires each person to pay the same amount or percentage of their income in taxes Progressive Tax – takes a higher percentage of taxes from a person with a higher income than it does from a person with a lower income. Regressive Tax – takes a larger % of tax from the income of a person with a smaller income than from a person with a higher income.

Analyze charts Page 494 Regressive tax summary Review in your groups Answer 1 & 2

Reading Check page 494 What are the three types of income tax systems?

Political Cartoon page 495 Discuss with in your group Answer 1, 2 & 3 RSS

Effects of Taxes Still controversial Economic consequence To know the effect, we need to identify what kind Is it direct or indirect? What is the impact?

Direct taxes A tax on income 1.No choice but to pay 2.One person’s income tax cannot be paid for by another

Indirect taxes Generally ends up as part of the price a consumer pays for a product where the tax (gov’t imposed), is included in the price of an item(s) Erin Neuman e.g. Seller must pay the tax who passes it on to the consumer

Tax Impact READ Tax Impact, page 496 Retell the “coal story” in your group RSS How does tax impact those who must buy, e.g., medicine? How may consumers choose not to pay a tax that is passed on as part of the cost of a good or service?

READING CHECK (PAGE 496) ANSWER IN YOUR NOTE BOOK ANSWER IN YOUR NOTE BOOK WHAT IS THE DIFFERENCE BETWEEN A DIRECT TAX AND AN INDIRECT TAX?

ASSESSMENT PAGE 496 ANSWER 2A – 4B IN YOUR NOTE BOOK

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