1. TYPES OF TAXES

2. Directions – step 1  Write a definition IN YOUR OWN WORDS for the following concepts:  Progressive tax  Regressive tax  Proportional tax  Income tax  Estate tax  Excise tax  Social security  Medicaid/medicare  Bonds

3. Regressive Taxes  Percentage of taxes goes down as your income goes up  Opposite of progressive  What are the positives?  What are the negatives?

4. Progressive Taxes  The tax rate (percentage) is higher at for people that make more money and lower for people that make less  What are the positives?  What are the negatives?

5. Proportional Taxes  Same percentage for everyone  What are the positives?  What are the negatives?

6. Income Tax  Progressive tax  Based on your tax bracket  Tax on the amount of money that you make  Taxable income – tax rate = income tax  Taxable income = income – deductions  If income tax < taxes paid, then you get a tax return  If income tax > taxes paid, then you owe the government  How do I figure out my income taxes? How do I figure out my income taxes?  Must file by April 15 th  If you make over $5,000 then you must file

7. Excise Tax  Taxes paid when you purchase goods  What are the positives?  What are the negatives?

8. Corporate Tax  Taxes on the profits made by corporations  Income tax for corporations

9. Estate Tax  Taxes that children pay on their parents’ property after their parents die  What are the positives?  What are the negatives?

10. Bonds  Money the government borrows and agrees to pay back with interest at a specific time

11. Budget Deficit & Surplus  Deficit: when the government spends more than it makes in revenue  Surplus: when the government spends less than it makes in revenue  The goals should be balance  Pg 678

12. Social Security  Gives money to people who are retired to disabled  Gives support to those who cannot work like they used to  What are the positives?  What are the negatives?

13. Medicare & Medicaid  Medicaid: helps pay for healthcare for the poor  Medicare: helps pay for healthcare for elderly people  Pg 689  What are the positives?  What are the negatives?

14. National Debt  More debt = more taxes  The taxpayers pay the interest on the national debt Debt increases when unemployment increases Debt increases during wartime

15. Checks & Balances and Separation of Powers at Work  Who creates the national budget?  Who approves the national budget?  Who decides how much money will be collected in taxes? Where does the process start?

16. Directions – step 2  Draw a picture that represents the concepts you defined in step 1

17. Directions – step 3  Create examples (scenarios) for each of the tax concepts  EX: John had to pay the federal government $5,000 in taxes because his father died and left John a house.