Why Do We Pay Taxes?
Name one public service that taxes help pay for.
Examples: schools, roads, parks, libraries, police, etc.
This is your income before deductions.
Gross income
This tax goes to the federal government.
Federal income tax
Sakina earns $12.50/hour for 15 hours. What is her gross pay?
$187.50
Jamila uses a public school, park, and library in one day. What do these three places have in common?
They are public services supported by tax money.
This is the income you actually take home, after deductions.
Net income
This tax helps fund Social Security benefits.
Social Security Tax
If your gross pay is $200 and $25 is deducted, what is your net pay?
$175
Jamila goes to a public school and later to a movie theater. Why might taxes pay for one but not the other?
The school is a public service; the movie theater is a private business.
What is a deduction?
Money subtracted from gross income.
This tax helps fund Medicare.
Medicare tax
Sakina’s gross pay is $187.50 and her deductions are $33.77. What is her net pay?
$153.73
Why does the government collect taxes from people’s paychecks?
To pay for public services and government programs.
Why is net pay usually lower than gross pay?
Taxes and other deductions are taken out.
Name two taxes that might appear as deductions on a paycheck.
Any two: federal income tax, state income tax, Social Security, Medicare.
Sakina paid $14.42 federal tax + $5 state tax. How much is that together?
$19.42
Give two examples from Jamila’s day of ways she benefits from taxes, even before she has her own paycheck.
Examples include public school, school transportation, parks, police, DMV, highways, or libraries.
Explain the relationship: Gross Income → Deductions → Net Income.
Gross income - deductions = net income
Sakina has federal, state, Medicare, and Social Security taxes deducted. Why are these amounts taken out before she receives her paycheck?
Employers withhold taxes from paychecks; those taxes help fund government programs and services.
Sakina earned $187.50 but received $153.73. Explain where the difference went.
$33.77 was deducted for federal income tax, state income tax, Medicare, and Social Security, leaving $153.73 in net pay.