TAXES & TAXATION Essential Question: How do policy-makers use fiscal and monetary policy to stabilize the economy? “In this world nothing can be said to be certain, except death and taxes.” Benjamin Franklin

What are taxes?  Taxes are mandatory payments to the government.  A government’s revenue—source of income.  In the U.S., taxes are levied at the local, state, and federal levels.

Why are taxes levied?  To fund public goods and services…

Why are taxes levied?  To pay for infrastructure…

Why are taxes levied?  To promote social and economic goals…

What types of taxes are there? Individual Income Taxes  Tax levied on personal income earned from wages and investments.

What types of taxes are there? Corporate Income Taxes  Tax levied on a company’s profits.

What types of taxes are there? Payroll Taxes  Taxes deducted directly from an employee’s paycheck.  The two largest-Social Security & Medicare.

What types of taxes are there? Excise and Luxury Taxes  Taxes on sales of certain goods, services, and high-priced luxury goods.

What types of taxes are there? Property Taxes  Taxes levied on the value of real property (homes, land, car, boat, etc.)

What types of taxes are there? Sales Taxes  Taxes on the sale of goods paid for by the consumer at the time of purchase.

What types of taxes are there? User Fees & Tolls  Taxes charged for the use of public facilities/services, and for permits/licenses.

What types of taxes are there? Estate and Inheritance Tax  Taxes levied on some or all of a person’s estate (property and possessions) left behind when they die.

TAXES BINGO

Tax Bingo  Fill your bingo board with each tax type in random order. NO REPEATS  Put a check or X in each box that you think the example is describing.  Across, down, or diagonal wins!

When Jenny’s father died, the Commonwealth of Virginia sent her a tax bill for $15,750. As executor of her father’s estate, she paid the bill after selling his house, car, and boat. What type of tax did Jenny pay? Tax Bingo

Joe is looking at buying a personal water craft (SeeDoo) to use at his lake house. He sees one for a good price but realizes that he would have to pay an annual tax of $1,200 to the City of Virginia Beach Tax Assessor if he buys it. What type of tax would Joe have to pay? Tax Bingo

The type of tax that includes Medicare tax and Social Security Tax… Tax Bingo

The tax you pay when you fill up your car with gas… Tax Bingo

 What tax type is illustrated in this receipt?

 Every year, Mr. and Mrs. Jones collect their W-2 income forms, 1099 investment income forms, and expense receipts, and meet with their accountant to file the forms necessary to pay (or get a refund for overpaying) this type of tax. Tax Bingo

 Helen and her family planned a trip to the Grand Canyon (after the government reopened following the shutdown ). To get in they must pay the National Parks Service $25 for a one-day family pass. This is an example of this type of tax…

Bob’s Sporting Goods pays an accountant to handle their books. This person must pay this type of tax for Bob quarterly… Tax Bingo

Thanks to workers having this tax taken from their paycheck, Mrs. Adams and Mrs. Dossett will have money for retirement (but it may not be there for you guys…sorry  ) Tax Bingo

George’s grandfather set aside $120,000 to help him pay for college. When George received this gift, he was shocked to have to pay 4.5% to the government in taxes. Tax Bingo

This tax is 5% in Virginia, but can be higher when a city, town, or county adds theirs to the bill… Tax Bingo

Hannah got a car for her 16 th birthday. The deal with her parent was that they would pay for the car, but she had to maintain it and pay for the registration. What kind of tax is this? Tax Bingo

When Kanye West bought Kim Kardashian’s 15 (yes, I said 15!!!) carat engagement ring, the state of California collected this tax from him too! Tax Bingo

Jay-Z and Beyoncé’s accountant handles all their finances, including their taxes. Every year, they must pay this tax on their 150 ft. yacht “Baby Blue.” Tax Bingo

VOCAB BINGO

 Fill your bingo board with terms from the list on the next slide. NO REPEATS  Put a check or X in each box that you think the example is describing.  Across, down, or diagonal wins! Vocab Bingo

Income redistributionMerger Economic mobilityDeregulation Eminent domainRegulatory agency Bid riggingProperty rights Gross Domestic ProductPer capita GDP Consumer Price IndexInflation rate RecessionInflation Poverty ratePrice fixing Economic stimulusBusiness cycle Expansionary Contractionary Easy-moneyTight-money PeakDepression TroughCrowding-out Vocab Bingo