1. Bell Work In your notebooks, Write down some things that taxes pay for. In your notebooks, Write down some things that taxes pay for.

2. Taxes

3. Taxes Tax – required payment to national, state or local governments Tax – required payment to national, state or local governments Power to tax – Power to tax – Article 1 of the Constitution

4. Tax Base – income, property or goods that are subject to tax 4 Types: 1. Individual income tax 2. Sales tax 3. Property tax 4. Corporate income tax (business owners)

5. Tax Structures Proportional – the same % for all levels of income Proportional – the same % for all levels of income Ex. $7000 – 15% = $1050 Ex. $7000 – 15% = $1050 $100000 – 15% = $15000 $100000 – 15% = $15000

6. Tax Structures cont. Progressive - % increases as income increases Progressive - % increases as income increases Income tax Income tax Regressive - % decreases as income increases Regressive - % decreases as income increases Sales tax Sales tax If your Annual income is $10,000 = $1000 in taxes is 10% $100,000 = $1000 in taxes is 1%

7. Characteristics of a good tax Simple – Easy to understand Simple – Easy to understand Efficient – easily collected Efficient – easily collected Certainty – When due, how much is due, ect. Certainty – When due, how much is due, ect. Fair Fair

8. International trade & taxes Imports – Products made in another country that are sold here Imports – Products made in another country that are sold here Exports – Products made in the US that are sold outside of this country Exports – Products made in the US that are sold outside of this country Tariff – Tax on imported goods Tariff – Tax on imported goods Import Quota – limits the quantity that can be purchased from another country Import Quota – limits the quantity that can be purchased from another country

9. What would happen if the US Dollar increases in value more than other countries? Exports to other countries would decrease, because they could not afford our products