Tax Quotes Benjamin Franklin said, "The only things certain in life are death and taxes." "The hardest thing in the world to understand is the income tax."

Tax Quotes Benjamin Franklin said, "The only things certain in life are death and taxes." "The hardest thing in the world to understand is the income tax." -- attributed to Albert Einstein "Give to Caesar what is Caesar's, and to God what is God's.“ Jesus "People who complain about taxes can be divided into two classes: men and women." – Unknown The student will explain how the government uses fiscal policy to promote price stability, full employment, and economic growth.

Taxes and Government Spending What are Taxes?
Tax – a required payment to a local, state, or national government The student will explain how the government uses fiscal policy to promote price stability, full employment, and economic growth.

The student will explain how the government uses fiscal policy to promote price stability, full employment, and economic growth.

Tax Structures Proportional Tax – % of income taxes remains the same for all income levels (Flat tax) Progressive Tax – % of income paid in taxes increases as income increases (Federal Income Tax) Regressive Tax - % of income paid in taxes decreases as income increases (Sales Tax) The student will explain how the government uses fiscal policy to promote price stability, full employment, and economic growth.

Proportional 25% income tax = $37,500 10% income tax = $1,000
Type of Tax Income of $10,000 Income of $150,000 Summary 10% flat tax = $1,000 10% of income 10% flat tax = $15,000 10% of income As income goes up, the percent of income taxed stays the same Proportional 10% income tax = $1,000 10% of income 25% income tax = $37,500 25% of income The more you make, the more they take. Progressive 6% State Sales Tax $5,000 in consumer goods = $300 .03 or 3% of income 6% State Sales Tax $5,000 in consumer goods = $300 .002 or .2 % of income The more you make the less the tax affects you. Regressive The student will explain how the government uses fiscal policy to promote price stability, full employment, and economic growth.

Who Bears the Burden? Who bears the burden of each?
Proportional – everyone pays the same percentage Everyone bears the burden Progressive – “more you make, more they take” Rich bear the burden. Regressive – more you make, less they take Poor bear the burden The student will explain how the government uses fiscal policy to promote price stability, full employment, and economic growth.

Regressive Tax A regressive tax is a tax where low income earners bear the burden. Social Security tax is an example. 6.2% on wages up to a maximum wage of $118,500. Person A makes $30,000 $30,000*.062 = $1,860 in taxes $1,860/$30,000 = 6.2% of wages. Person B makes $200,000 $118,500*.062 = $7,347 in taxes $7,347/$200,000 = 3.67% of wages. Person C makes $500,000 $7,347/$500,000 = 1.47% of wages. Since the higher income earners pay the smallest percentage of their income in tax, it is a regressive tax. The student will explain how the government uses fiscal policy to promote price stability, full employment, and economic growth.

Individual Income Taxes
$934.00 The student will explain how the government uses fiscal policy to promote price stability, full employment, and economic growth.

Individual Income Taxes
Tax Withholding – taxes are taken out of your pay before you receive it; ensures payment to the government The student will explain how the government uses fiscal policy to promote price stability, full employment, and economic growth.

Stossel Taxes The student will explain how the government uses fiscal policy to promote price stability, full employment, and economic growth.

Tax Rates Explained https://www.youtube.com/watch?v=2RU6kHupY50

Obama Videos Income Inequality Joe the Plumber You Didn’t Build That

What is a regressive tax?
What is an example of a regressive tax in the real world? Based on the above table, if each person paid $1,000 worth of taxes, who is paying the highest percentage rate of taxes? Based on the above table, if each person paid $1,000 worth of taxes, who is paying the lowest percentage rate of taxes? Therefore, who is bearing the burden of the regressive taxes in our economy? Cory works at a fast-food restaurant. He makes $10,000 a year. How much would he take home after paying $1,000 regressive income tax? What percentage of his income would be paid in taxes? How much would his boss, who makes $25,000, take home? What percentage of his boss’s income would be paid in taxes? Who is paying more, percentage-wise in taxes? As income goes up, % of tax goes down Sales Low income High income Low income $9,000 10% $24,000 4% Cory The student will explain how the government uses fiscal policy to promote price stability, full employment, and economic growth.

Suppose the state of Georgia mandates a fee for driver’s licenses of $25. Fill in the below table based on 2 people with different incomes. Income Amount of Tax Percent of income Paid in Tax $5,000 $25 $50,000 .5% .05% Who is bearing the burden of this tax? What alternative could the state use to make this tax system fairer? Low income Charge high income earners a higher amount of tax for the driver’s licenses The student will explain how the government uses fiscal policy to promote price stability, full employment, and economic growth.

Proportional taxes, 10% on all income
Income x percent of income paid in tax = amount of tax Example: $15,000 x .10 (10%) = $1,500 Proportional taxes, 10% on all income Income Amount of Tax Percent of income Paid in Tax $5,000 10% $10,000 $25,000 $50,000 $100,000 $1,000,000 500 1,000 2,500 5,000 10,000 100,000 What is a proportional tax? How do a proportional tax and a progressive tax differ? The student will explain how the government uses fiscal policy to promote price stability, full employment, and economic growth.

Taxes in a market economy
With the money Erin earned baby-sitting, she bought a book priced at $5.95. She paid a tax of $.36 on the book. What type of tax did she pay? Mr. Presutti paid taxes on his salary of $65,000. What type of tax did he pay? Jonah paid $3,000 at the end of the year on his home. What type of tax did he pay? Sales Income Property The student will explain how the government uses fiscal policy to promote price stability, full employment, and economic growth.

Who Fixes the Economy? The student will explain how the government uses fiscal policy to promote price stability, full employment, and economic growth.

Monetary and Fiscal Policy Making to Affect the Macroeconomy
Monetary Policy Fiscal Policy The student will explain how the government uses fiscal policy to promote price stability, full employment, and economic growth.

Federal Government How does the Federal Government fix problems?
Fiscal Policy What are the Federal Government’s tools of fiscal policy? Taxation Government Spending The student will explain how the government uses fiscal policy to promote price stability, full employment, and economic growth.

Fiscal Policy and The Federal Budget
Fiscal Policy – Government spending/tax policies that influence the economy. The goal is to create policies that will stabilize the economy Main players : Congress The President The student will explain how the government uses fiscal policy to promote price stability, full employment, and economic growth.

How Fiscal Policy Influences the Economy
Expansionary Fiscal Policy (grow the economy) Government spends more Taxes Less; gives consumers/firms more money to spend The student will explain how the government uses fiscal policy to promote price stability, full employment, and economic growth.

How Fiscal Policy Influences the Economy
Contractionary Fiscal Policy (slow the economy) Government spends less Higher tax-rates will give consumers/firms less money The student will explain how the government uses fiscal policy to promote price stability, full employment, and economic growth.

Border Wall The student will explain how the government uses fiscal policy to promote price stability, full employment, and economic growth.

Budget Deficits and the National Debt
Balanced budget – money going into the U.S. Treasury is the same amount of money going out Revenue = Spending The last balanced budget occurred in 1997 under President Bill Clinton The student will explain how the government uses fiscal policy to promote price stability, full employment, and economic growth.

Balancing the Budget Budget Surplus – occurs when the government takes in more than it spends Revenue > Spending Budget Deficit – occurs when the government spends more than it takes in Revenue < Spending The student will explain how the government uses fiscal policy to promote price stability, full employment, and economic growth.

Dealing with a Budget Deficit
Reduce Spending – cut spending on government programs Increase Taxes Borrow money – government borrows money China owns 1 trillion dollars of US debt The student will explain how the government uses fiscal policy to promote price stability, full employment, and economic growth.

The National Debt National debt – the total amount of money the federal government owes overall Combination of all borrowing over time Budget deficit – the amount of money the government owes to bondholders in one fiscal year The student will explain how the government uses fiscal policy to promote price stability, full employment, and economic growth.

IOUSA The student will explain how the government uses fiscal policy to promote price stability, full employment, and economic growth.

Government Video The student will explain how the government uses fiscal policy to promote price stability, full employment, and economic growth.

China Video The student will explain how the government uses fiscal policy to promote price stability, full employment, and economic growth.

Bumper sticker and Political Cartoon Assignment
Design 2 bumper stickers Choose one tax system that you support and one that you do not support. Create a slogan and make sure to include one of the following terms in your slogan. Progressive Proportional Regressive Draw a political cartoon that relates to Government Spending Your theme must include 1 on of the following: Expansionary fiscal policy, the government should spend more money. Contractionary fiscal policy, the government should cut back on spending. National Debt – total amount of money earned Budget Deficit – overspending in one fiscal year Be Aggressive Go Progressive! Don’t Be Emotional, Be Proportional The student will explain how the government uses fiscal policy to promote price stability, full employment, and economic growth.

Expansionary Contractionary Expansionary Contractionary
Fiscal Policy Expansionary/ Contractionary Explanation 1. The government cuts business and personal income taxes and increases its own spending. 2. The government increases the personal income, Social Security and corporate income tax. 3. Government spending goes up while taxes remain the same. 4. The government reduces the wages of its employees while raising taxes on consumers and businesses. Lower taxes = Increased spending = Rise in GDP Expansionary Higher taxes = Decrease spending = Fall in GDP Contractionary Expansionary Higher spending = Increase GDP Decreased Spending and Increased Taxes = Fall in GDP Contractionary The student will explain how the government uses fiscal policy to promote price stability, full employment, and economic growth.

Model of aggregate demand & aggregate supply
Model used to explain the macroeconomy Aggregate - sum of all supply and demand in an economy Two axes: Economy's total output (stuff we produce) Average Price Levels(CPI) Price Level (CPI) Aggregate supply (Land, Labor, Capital, Entrepreneurship) Aggregate demand (CIGNX) PLE Y Quantity of Output The student will explain how the government uses fiscal policy to promote price stability, full employment, and economic growth.

Aggregate Demand Consumer Spending Government Spending
Investment Spending Foreign Spending (x-m) The student will explain how the government uses fiscal policy to promote price stability, full employment, and economic growth.

Aggregate Demand Curve
Sum of C+I+G+NX (real GDP) at each price level Downward sloping Low price levels increase the quantity of goods and services, vice versa Price Level (CPI) Aggregate demand (AD) The student will explain how the government uses fiscal policy to promote price stability, full employment, and economic growth. Quantity of Output

Capital Land Labor Entrepreneur Aggregate Supply

The Aggregate Supply Curve
AS curve – total quantity of goods and services firms can produce and sell at any given price level What shifts the curve? Changes in Land, Labor, Capital The student will explain how the government uses fiscal policy to promote price stability, full employment, and economic growth.

What Shifts the Aggregate Demand Curve?
Price Level A B C Quantity of Output Situation Change in AD New AD Curve Congress cuts taxes Business spending decreases Government spending increases; no new taxes Survey shows consumer confidence jumps C A C C The student will explain how the government uses fiscal policy to promote price stability, full employment, and economic growth.

What Shifts the Aggregate Supply Curve?
Price Level A B C Quantity of Output Situation Change in AS New AD Curve Drought hits American Southwest, Corn yields fall OPEC successfully increases oil prices Labor productivity increases dramatically Giant natural gas discovery decreases energy prices Computer technology brings new efficiency Research shows that improved schools have increased the skills of American workers A A C C C C The student will explain how the government uses fiscal policy to promote price stability, full employment, and economic growth.

Capital Land Labor Entrepreneur Aggregate Demand Consumer Spending
Government Spending Investment Spending Foreign Spending (x-m) Aggregate Supply Capital Land Labor Entrepreneur The student will explain how the government uses fiscal policy to promote price stability, full employment, and economic growth.

Aggregate Demand or Supply?
Aggregate Supply The student will explain how the government uses fiscal policy to promote price stability, full employment, and economic growth.

Aggregate Demand or Supply?
Scenario AD or AS 1. A factory 2. A printing press 3. A woman buys a hamburger for her child 4. A U.S. company sells a jet to a foreign country 5. A company builds a new factory Trees 7. A corn field 8. A coal mine 9. Students purchase tickets for a football game 10. Two newlyweds buy a house Buying (CIGNX) = AD Factor of Production = AS AS AS AD AD AD AS AS AS AD AD The student will explain how the government uses fiscal policy to promote price stability, full employment, and economic growth.

AD AS Scenarios Price AS1 Level AS Pe1 Pe AD Y1 Y Quantity of Output

AD AS Scenarios A significant increase in world oil prices
Government announces a large increase in spending on health and education Average wage rises way above inflation for the third month running Exchange rate appreciation knocks export hopes for manufacturing Price Level AS AD1 AD Pe1 Y1 Pe Y Quantity of Output The student will explain how the government uses fiscal policy to promote price stability, full employment, and economic growth.

Government announces a large increase in spending on health and education Average wage rises way above inflation for the third month running Exchange rate appreciation knocks export hopes for manufacturing Price Level AS1 AS AD Pe1 Y1 Pe Y Quantity of Output The student will explain how the government uses fiscal policy to promote price stability, full employment, and economic growth.

Government announces a large increase in spending on health and education Average wage rises way above inflation for the third month running Exchange rate appreciation knocks export hopes for manufacturing Price Level AS AD AD1 Pe Y Pe1 Y1 Quantity of Output The student will explain how the government uses fiscal policy to promote price stability, full employment, and economic growth.

Government announces a large increase in spending on health and education Average wage rises way above inflation for the third month running Exchange rate appreciation knocks export hopes for manufacturing US productivity levels at their highest level for 10 years A booming stock market leads to highest rate of retail sales in a century Price Level AS AS1 AD Pe Y Pe1 Y1 Quantity of Output The student will explain how the government uses fiscal policy to promote price stability, full employment, and economic growth.

Government announces a large increase in spending on health and education Average wage rises way above inflation for the third month running Exchange rate appreciation knocks export hopes for manufacturing US productivity levels at their highest level for 10 years A booming stock market leads to highest rate of retail sales in a century Price Level AS AD1 AD Pe1 Y1 Pe Y Quantity of Output The student will explain how the government uses fiscal policy to promote price stability, full employment, and economic growth.

Effects of Fiscal Policy Chart
Scenario Expansionary/ Contractionary Effect on Federal Budget Objective for Aggregate Demand Action on Taxes Action on Gov’t Spending Effect on the National Debt 1. National unemployment rate rises to 12% 2. Inflation is strong at a rate of 14% per year. 3. Surveys show consumers are losing confidence in the economy, retail sales are weak and business inventories are increasing rapidly 4. Business sales and investment are expanding rapidly, and economists think strong inflation lies ahead. Move toward a deficit Expansionary Move toward a surplus Contractionary Move toward a deficit Expansionary Move toward a surplus Contractionary The student will explain how the government uses fiscal policy to promote price stability, full employment, and economic growth.

Summary of Monetary and Fiscal Policy
Descriptor Monetary Policy Fiscal Policy Agency Federal Reserve Federal Government 1 Central Bank, 12 Districts Structure President and Congress Janet Yellen Barack Obama Head Official Money Supply and Banking Focus Federal Budget Government Spending, Taxes OMOs, RRR, Interest Rates Tools for Policymaking Buy bonds, lower RRR and Interest Rates Expansionary Policy Spend more, tax less Sell bonds, raise RRR and Interest Rates Contractionary Policy Spend less, tax more The student will explain how the government uses fiscal policy to promote price stability, full employment, and economic growth.

Chapter 15 Practice Worksheet
1. If a country’s central bank were to engage in activist stabilization policy, in which direction should it move the money supply in response to the following events? A wave of optimism boosts business investment and household consumption causing price levels to increase. Decrease the money supply To balance its budget, the government raises taxes and reduces expenditures causing a slowdown in the economy. Increase the money supply OPEC raises the price of crude oil causing people’s disposable income to reduce. The taste for the country’s products amongst the residents of other countries declines. The stock market falls. The student will explain how the government uses fiscal policy to promote price stability, full employment, and economic growth.

2. In which direction should the Federal Reserve move interest rates in response to the following events? A wave of optimism boosts business investment and household consumption causing price levels to increase. Increase interest rates To balance its budget, the government raises taxes and reduces expenditures causing a slowdown in the economy. Decrease interest rates OPEC raises the price of crude oil causing people’s disposable income to reduce. The taste for the country’s products amongst the residents of other countries declines. The stock market falls. The student will explain how the government uses fiscal policy to promote price stability, full employment, and economic growth.

3. If policy makers were to use fiscal policy to actively stabilize the economy, in which direction should they move government spending and taxes? A wave of optimism boosts business investment and household consumption causing price levels to increase. Decrease spending, increase taxes To balance its budget, the government raises taxes and reduces expenditures causing a slowdown in the economy. Increase spending, decrease taxes OPEC raises the price of crude oil causing people’s disposable income to reduce. The taste for the country’s products amongst the residents of other countries declines. The stock market falls. The student will explain how the government uses fiscal policy to promote price stability, full employment, and economic growth.

Daily Assignment Questions State and Local Taxes and Spending, pgs
What does a states operating budget pay for? List examples. What does a state’s capital budget pay for? List examples How do the state budgets differ from the federal government? Where are taxes spent? List and describe each of the following: Education Public Safety Highways and Transportation Public Welfare Arts and Recreation Administration The student will explain how the government uses fiscal policy to promote price stability, full employment, and economic growth.

Flow Chart Types of Taxes, pgs. 365-369
Individual Income Taxes Corporate Income Taxes Social Security, Medicare and Unemployment Taxes Other Types of Taxes 1. Pay-As-You-Earn Taxation 2. Tax Withholding 3. Tax Return 4. Taxable Income 5. Personal Exemptions 6. Deductions 7. Tax Brackets 1. Impact on Federal Budget 2. Deductions 3. Progressive structure of Corporate taxes 1. FICA 2. Social Security 3. Medicare 4. Unemployment Taxes 1. Excise Taxes 2. Estate Taxes 3. Gift Taxes 4. Import Taxes (Tariffs) 5. Tax Incentive The student will explain how the government uses fiscal policy to promote price stability, full employment, and economic growth.

Consumers Expect a Recession Fall in AD – Prices fall, real GDP falls
Foreign Income Rises Rise in AD – Prices rise, real GDP rises Foreign price levels fall Fall in AD – Prices fall, real GDP falls The student will explain how the government uses fiscal policy to promote price stability, full employment, and economic growth. Workers Expect Future Inflation, Negotiate Higher Wages Now Fall in AS – Prices rise, real GDP falls Technological Improvements Increase Productivity Rise in AS – Prices fall, real GDP rises Government Spending Increases Rise in AD – Prices rise, real GDP rises

Economics Daily Ten The BEST example of a progressive tax in the United States is the federal excise tax on gasoline the Social Security tax the federal personal income tax state sales taxes The BEST example of a progressive tax in the United States is the federal excise tax on gasoline the Social Security tax the federal personal income tax state sales taxes The best example of a regressive tax in the US is the federal income tax sales tax Property tax State income tax The best example of a regressive tax in the US is the federal income tax sales tax Property tax State income tax The student will explain how the government uses fiscal policy to promote price stability, full employment, and economic growth.

Economics Daily Ten Which of the following results when federal government spending is more than the federal government’s total revenue? a trade surplus a budget deficit a negative balance of payments a federal budget surplus Which of the following results when federal government spending is more than the federal government’s total revenue? a trade surplus a budget deficit a negative balance of payments a federal budget surplus The student will explain how the government uses fiscal policy to promote price stability, full employment, and economic growth.

Economics Daily Ten If the US is running a deficit the fed govt can do which of the following to deal with the problem? raise taxes borrow money reduce spending reduce taxes If the US is running a deficit the fed govt can do which of the following to deal with the problem? raise taxes borrow money reduce spending reduce taxes The student will explain how the government uses fiscal policy to promote price stability, full employment, and economic growth.

Economics Daily Ten What is the difference between a budget deficit and the national debt? The national debt is for 1 year A budget deficit is for all the years of borrowing A budget deficit is for 1 year, while the national debt is for all the years of borrowing The national debt is for 1 year, while a budget deficit is for all the years of borrowing What is the difference between a budget deficit and the national debt? The national debt is for 1 year A budget deficit is for all the years of borrowing A budget deficit is for 1 year, while the national debt is for all the years of borrowing The national debt is for 1 year, while a budget deficit is for all the years of borrowing The student will explain how the government uses fiscal policy to promote price stability, full employment, and economic growth.

Economics Daily Ten If the federal government is attempting to encourage spending by consumers and businesses, a fiscal policy BEST serving this purpose would be decreasing taxes decreasing government spending reducing the investment tax credit balancing the budget If the federal government is attempting to encourage spending by consumers and businesses, a fiscal policy BEST serving this purpose would be decreasing taxes decreasing government spending reducing the investment tax credit balancing the budget The student will explain how the government uses fiscal policy to promote price stability, full employment, and economic growth.

Economics Daily Ten Graph the following headlines:
U.S. consumer spending declines amidst economic woes Government appropriates additional 50 million to states for education A hurricane devastates US manufacturing The student will explain how the government uses fiscal policy to promote price stability, full employment, and economic growth.

Essential Questions What is the difference between monetary and fiscal policy? What is the difference between the national debt and a budget deficit? Monetary policy deals with decisions made by the ________, while fiscal policy deals with decisions made by the ______________________ Fed the federal government. A budget deficit is earning less than you spend for ________, while national debt reflects ____________________________ one year all borrowing throughout U.S. history. The student will explain how the government uses fiscal policy to promote price stability, full employment, and economic growth.

Daily Assignment Questions – Ch. 14 Section 1 pgs. 359 – 360
*Answer in complete sentences* How did taxes affect early American colonists? What gives the government the right to tax U.S. citizens? What is the purpose of taxation? What are some things that are provided by the government through revenue? Where is the power to tax found in the Constitution? What are the two limitations of taxes found in the taxation clause? What is Congress unable to tax? What is a tax base? List the items that could be included in the tax base. The student will explain how the government uses fiscal policy to promote price stability, full employment, and economic growth.

HOW MUCH WILL IT COST? To find the total sales tax rate you will pay, add the tax rates of everywhere you are. If people in this county want to buy a car, they have 2 choices. What are they? City sales tax only applies inside a city’s boundaries. What is B-Town’s tax rate? State sales tax applies everywhere in the state. What is the state tax rate? County sales tax applies everywhere in the county. What is the county tax rate? If you are in B-Town, what will be the total sales tax rate? Here is an imaginary county in an imaginary state. Now find the 3 biggest stores in the county. There are 2 cities in this county. Name them. What is A-Town’s tax rate? Let’s learn how to calculate sales tax. 5% + 2% + 3% = 10% The student will explain how the government uses fiscal policy to promote price stability, full employment, and economic growth.

HOW MUCH WILL IT COST? Example: How much will you pay for a $50 shirt at Bigmart in A-Town? 1) ADD to find the tax rate: State tax % County tax % City tax % Total Tax % The student will explain how the government uses fiscal policy to promote price stability, full employment, and economic growth.

The tax on this shirt will be $4.50.
HOW MUCH WILL IT COST? Example: How much will you pay for a $50 shirt at Bigmart in A-Town? 2) MULTIPLY the tax by the price: $ 50 x .09  price  tax rate $4.50 The tax on this shirt will be $4.50. The student will explain how the government uses fiscal policy to promote price stability, full employment, and economic growth.

The shirt will cost $54.50 at Bigmart in A-Town.
HOW MUCH WILL IT COST? Example: How much will you pay for a $50 shirt at Bigmart in A-Town? 4) ADD the tax and the price to see the final cost: $ 50.00 54.50 The shirt will cost $54.50 at Bigmart in A-Town. The student will explain how the government uses fiscal policy to promote price stability, full employment, and economic growth.

The headphones will cost $10.90 in A-Town and $11.00 in B-Town.
HOW MUCH WILL IT COST? You try it: 1) A pair of headphones costs $10 at both Bigmart in A-Town and Hugemart in B-Town. What would you actually pay for the headphones at each store? In A-Town: In B-Town: Tax rate = 9% $10 x .09 = 90 Tax = $0.90 Tax rate = 10% $10 x .10 = 100 Tax = $1.00 To use this slide with an interactive white board, delete the answer calculations from the slide and have students solve the problems on the white board. Use the printed teacher guide to check students’ work. The headphones will cost $10.90 in A-Town and $11.00 in B-Town. The student will explain how the government uses fiscal policy to promote price stability, full employment, and economic growth.

The new car will cost $16,350 in A-Town and $16,050 at Bob’s.
HOW MUCH WILL IT COST? You try it: 2) Lisa is going to buy a new car! It costs $15,000 at both A-Town Dealership and at Bob’s County Dealership. What would she actually pay for the car at each place? In A-Town: At Bob’s: Tax rate = 9% $15,000 x .09 = 1,350 Tax = $1,350.00 Tax rate = 7% $15,000 x .07 = 1050 Tax = $1,050.00 To use this slide with an interactive white board, delete the answer calculations from the slide and have students solve the problems on the white board. Use the printed teacher guide to check students’ work. The new car will cost $16,350 in A-Town and $16,050 at Bob’s. The student will explain how the government uses fiscal policy to promote price stability, full employment, and economic growth.

The stereo will cost $275 in B-Town and $274.99 at the County Store.
HOW MUCH WILL IT COST? You try it: 3) A stereo costs $257 at the County Store and $250 at Hugemart in B- Town. With taxes, what would you actually pay at each store? At the County Store: In B-Town: Tax rate = 10% $250 x .10 = 25 Tax = $25.00 = $275 Tax rate = 7% $257 x .07 = 17.99 Tax = $17.99 = To use this slide with an interactive white board, delete the answer calculations from the slide and have students solve the problems on the white board. Use the printed teacher guide to check students’ work. If it costs you $10 in gas to drive to Hugemart, at which store will the stereo end up costing you the least? The County Store. The stereo will cost $275 in B-Town and $ at the County Store. The student will explain how the government uses fiscal policy to promote price stability, full employment, and economic growth.

HOW MUCH WILL IT COST? You try it: $1.75 $1.75 $0.75 $0.75
4) The state is tired of people putting gum under tables and chairs. It just put a $1 excise tax on each pack of gum! Gum used to cost $0.75 at both Bigmart and Hugemart. What will the new price tags say? Bigmart $1.75 Hugemart $1.75 $0.75 $0.75 The price goes up $1 per pack everywhere, so the new price will be $1.75. The student will explain how the government uses fiscal policy to promote price stability, full employment, and economic growth.

REALITY (PAY)CHECK Your paycheck comes with a pay stub. The pay stub gives details about how much you earn and the taxes you pay. Check out the parts of Wanda Worker’s pay stub. The student will explain how the government uses fiscal policy to promote price stability, full employment, and economic growth.

1. How much does Wanda earn per hour?
REALITY (PAY)CHECK 1. How much does Wanda earn per hour? $12.75 The student will explain how the government uses fiscal policy to promote price stability, full employment, and economic growth.

2. What are Wanda’s total earnings for the current pay period?
REALITY (PAY)CHECK 2. What are Wanda’s total earnings for the current pay period? $1,020.00 The student will explain how the government uses fiscal policy to promote price stability, full employment, and economic growth.

3. List the 4 kinds of taxes that are taken out of Wanda’s check.
REALITY (PAY)CHECK Federal Social Security Medicare State 3. List the 4 kinds of taxes that are taken out of Wanda’s check. The student will explain how the government uses fiscal policy to promote price stability, full employment, and economic growth.

4. Which tax had the least taken out? The most?
REALITY (PAY)CHECK 4. Which tax had the least taken out? The most? Least: Medicare tax Most: Federal income tax The student will explain how the government uses fiscal policy to promote price stability, full employment, and economic growth.

5. How much did Wanda pay in taxes this pay period?
REALITY (PAY)CHECK 5. How much did Wanda pay in taxes this pay period? $188.64 The student will explain how the government uses fiscal policy to promote price stability, full employment, and economic growth.

7. How much federal tax has Wanda paid so far this year?
REALITY (PAY)CHECK 7. How much federal tax has Wanda paid so far this year? $1,112.40 The student will explain how the government uses fiscal policy to promote price stability, full employment, and economic growth.

8. What was Wanda’s gross pay during the current pay period?
REALITY (PAY)CHECK 8. What was Wanda’s gross pay during the current pay period? $1,020.00 The student will explain how the government uses fiscal policy to promote price stability, full employment, and economic growth.

9. Was Wanda’s entire gross pay taxable?
REALITY (PAY)CHECK  Yes  No 9. Was Wanda’s entire gross pay taxable?  The student will explain how the government uses fiscal policy to promote price stability, full employment, and economic growth.

-taxes are taken out - actually receive REALITY (PAY)CHECK
10. The difference between gross pay and net pay is that gross pay is the amount a person earns before____ while net pay is the amount they The student will explain how the government uses fiscal policy to promote price stability, full employment, and economic growth.

11. Wanda receives a check for which amount?
REALITY (PAY)CHECK 11. Wanda receives a check for which amount?  Gross pay Net pay Taxable amount  The student will explain how the government uses fiscal policy to promote price stability, full employment, and economic growth.

Health insurance 401k Retirement REALITY (PAY)CHECK
12. What are the two pre-tax deductions that are taken out of Wanda’s check? Health insurance 401k Retirement The student will explain how the government uses fiscal policy to promote price stability, full employment, and economic growth.

  Yes  No REALITY (PAY)CHECK
13. Wanda paid $93 toward health insurance and retirement. Did she pay taxes on that $93?  Yes  No  The student will explain how the government uses fiscal policy to promote price stability, full employment, and economic growth.

REALITY (PAY)CHECK 14. If Wanda’s state did not have an income tax, how much extra money would she have kept so far this year? $300.36 The student will explain how the government uses fiscal policy to promote price stability, full employment, and economic growth.

Tax Quotes Benjamin Franklin said, "The only things certain in life are death and taxes." "The hardest thing in the world to understand is the income tax."

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Tax Quotes Benjamin Franklin said, "The only things certain in life are death and taxes." "The hardest thing in the world to understand is the income tax."

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Presentation on theme: "Tax Quotes Benjamin Franklin said, "The only things certain in life are death and taxes." "The hardest thing in the world to understand is the income tax.""— Presentation transcript:

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