Tax basics
What is taxation?
Money paid to the government
What is gross income?
Money you earn
What is a progressive tax?
Higher income = higher tax
What should a good tax be?
Easy to understand
What is 10% of $20,000?
$2,000
What does the IRS do?
Collects taxes
What is net income?
Money you keep
What is a regressive tax?
Higher income = lower tax percentage
What should good taxes avoid?
Loopholes
$20,000 - $2,000 = ?
$18,000
What happens if you pay too much in taxes?
You get a refund
What is the formula for net income?
Gross income - taxes
What is an example of a regressive tax?
Sales tax
What should taxes not create?
Negative incentives
What is 25% of $37,500?
$9,375
What happens if you pay too little in taxes?
You pay the difference
If you make more money, what usually happens to your income tax?
Your tax rate goes up
Which tax takes a smaller percentage as income gets higher?
Regressive tax
What are the 3 main ideas of a good tax?
Simple, no negative incentives, no loopholes
$37,500 - $9,375 = ?
$28,125
Who said “death and taxes” are certain?
Benjamin Franklin
What can be added to your tax rate depending on your state?
10–15%
Progressive taxes are common in what places?
USA and Europe
Who gave ideas about good taxes?
Adam smith
f you owe $9,375 but paid $10,375, how much is your refund?
$1,000