Bases
A tax on goods or services sold
Sales tax
Percentage paid in taxes is the same at all income levels
Proportional taxes
National Health Insurance program. FICA taxes are taken out for this.
Medicare
What is the budget for day to day spending? Long term investment?
Operating Budget/Capital Budget
The government's main source of revenue is
federal individual income tax
What is a tax on a person's earnings?
Individual Income Tax
Describe a progressive tax structure
As income increases, the percentage of taxes increases
What are the four characteristics of a tax?
Certainty, Efficiency, Simplicity, Equity
State governments spend most of their tax revenue on
Education
Who withholds money for FICA taxes?
Employers
A tax on gasoline, cigarettes, alcohol, plane tickets, etc.
Excise tax
A sales tax is an example of a
Regressive tax
One characteristic of a tax is equity? Why does a tax need this characteristic?
The tax system should be fair, so that no one has too much or too little of the burden
California had the highest state income tax rate at 13.3%. Based on the map we looked at in class, what state had the second highest rate?
Maine
Protects people from risks and provides a stable income floor. The majority of FICA taxes go towards this.
Social Security
Local governments collect most of their tax revenue from what tax base?
Property taxes
Bill was in the 25% tax bracket when he paid his federal income taxes last year. He got a raise this year and he now pays out of the 28% tax bracket? What kind of tax structure is this an example of?
Progressive
Fairness in taxes are measured by what two criteria?
Benefits received and ability to pay
Describe why it is important for states to put tax revenue into education
Funding public schools lowers tuition, enabling more people to get higher education and therefore more jobs.
Selena makes $350,000 a year and pays $21,000 in taxes at a 6% rate. Tony makes $50,000 a year and pays $3,000 in taxes at a 6% rate. What kind of tax structure is this?
Proportional
What is another name for an excise or sin tax?
Luxury tax
On what day of the year is your federal income tax return due to the government?
April 15
Describe why taxes are important for a functioning society.
Taxes are the price we pay for civilization.
Name 6 of the 9 states that do not have a state income tax
Tennessee, Florida, New Hampshire, Texas, Alaska, Washington, Wyoming, Nevada, South Dakota
The Department of Defense gets the biggest cut of the Federal Government's discretionary spending. Name 3 of the 5 other programs we mentioned in class that get money under discretionary spending.
Education, research, student loans, disaster aid, civilian salaries