1. Taxes

2. Types of taxes
Income Taxes
Excise Taxes
Sales Taxes
Property Taxes

3. Income Taxes
The federal income tax was authorized by the 16th Amendment in 1913.
Most people in the United States have income tax withheld from their paychecks.
The income tax is the largest source of federal revenue.

4. Income Taxes (Cont.) Income taxes could also be paid on
Interest earned from a bank
Money earned from the profit you make on the sale of stock or a property called capital gains taxes
Dividends paid by a company in which you own stock
Money you win from gambling or the lottery

5. Excise Taxes
Considered a user tax - if you don’t want to pay the tax, don’t use the product.
These are taxes paid on specific goods
Gas
Alcohol
Cigarettes
Taxes are paid per unit (per gallon, per pack, etc.)

6. Sales Taxes There is no federal sales tax
Sales taxes are a percentage of the purchase price
Most states exclude some items from the sales tax (in Minnesota we exclude many things from sales tax like clothing and food)

7. Property Taxes There is no federal property tax
Property taxes are paid by businesses and individuals on their real personal property
Houses
Cars
Property taxes typically are a percentage of the value of the property.

8. Categories of taxes
Progressive - The more money you make, the higher the percentage of your income you pay in taxes
Regressive - The higher your income, the lower the percentage income paid in taxes.