Income Tax-Income Tax- is a tax on income the is a tax on income the money an individual or business money an individual or business earns.earns.

The 16The 16thth amendment in amendment in 1913 gave our 1913 gave our government the government the power to collect power to collect such a tax. such a tax.

The government gets ½ its The government gets ½ its revenue from incomes taxes.revenue from incomes taxes.

Most states and Most states and cities have cities have income taxes as income taxes as well.well.

2 types of income tax 2 types of income tax personalpersonal and and corporatecorporate..

PersonaPersonall- individuals pay personal - individuals pay personal income taxes based on the money income taxes based on the money they earn each year.they earn each year.

CorporateCorporate- Corporations pay - Corporations pay corporate income taxes based on corporate income taxes based on their annual profits.their annual profits.

The deadline each year to file a The deadline each year to file a tax return is April 15.tax return is April 15.

ExemptionExemption- the amount of money - the amount of money subtracted from each person before subtracted from each person before determining taxes.determining taxes.

In 1996 the exemption was 2,550 In 1996 the exemption was 2,550 plus $2550 for each dependent. plus $2550 for each dependent.

A tax payer and a unemployed A tax payer and a unemployed spouse would claim $5,100spouse would claim $5,100

Each child is an exemption.Each child is an exemption.

Federal Income taxes are Federal Income taxes are ProgressiveProgressive

ProgressiveProgressive- - People with People with higher incomes higher incomes must pay a must pay a higher % of the higher % of the taxes.taxes.

2009 Tax rates2009 Tax rates

IncomeIncome Your tax bracketYour tax bracket

0$0$ ---$8,350---$8,350 10%10%

$8,350---$33,950$8,350---$33,950 15%15%

$33,950---$82,250$33,950---$82,250 25%25%

$82,250---$171,550$82,250---$171,550 28%28%

$171,550--- $372,950 $171,550--- $372,950 33%33%

$ 372,950--- and above$ 372,950--- and above 35%35%

You pay only the % up to the next You pay only the % up to the next amount before it increases.amount before it increases.

$100,00 salary$100,00 salary

$ 8,025   minus   0 )  x .10 :$   $ 8,025   minus   0 )  x .10 :$   802.50(32,550   minus  8,025 )  802.50(32,550   minus  8,025 )  x .15 :3,678.75(65,725   minus  32,550 )  x .15 :3,678.75(65,725   minus  32,550 )  x .25 :8,293.75(100,000   minus x .25 :8,293.75(100,000   minus 65,725 )x.28   Total:   $ 22,372.0065,725 )x.28   Total:   $ 22,372.00

Property Taxes-Property Taxes-aa tax based on the tax based on the value of property.value of property.

Usually property means real estate Usually property means real estate can it can also mean cars and can it can also mean cars and jewelry.jewelry.

An assessor has a system to An assessor has a system to determine the worth of your determine the worth of your property.property.

Property tax is usually a % of the Property tax is usually a % of the assessed property.assessed property.

In one community it might be 4.5%, In one community it might be 4.5%, which on a $100,000 house would which on a $100,000 house would end up being $4,500.end up being $4,500.

In another community it might be In another community it might be 2%, which on a $100,000 would end 2%, which on a $100,000 would end up being $2,000. up being $2,000.

Sales Tax-Sales Tax- is a tax placed on the is a tax placed on the sale of various products.sale of various products.

The purchaser The purchaser pays the tax at the pays the tax at the time of the time of the purchase.purchase.

The seller collects The seller collects the tax and sends the tax and sends it to the it to the government. government.

Excise Tax- a tax on certain Excise Tax- a tax on certain productsproducts

Every state places an excise tax on Every state places an excise tax on cigarettes , alcohol and gasoline.cigarettes , alcohol and gasoline.

A sales tax is regressive because A sales tax is regressive because the tax is the same for everybody.the tax is the same for everybody.

Sales taxes hit Sales taxes hit poor and low poor and low income people income people the hardest. the hardest. Because they Because they must spend all must spend all their earnings their earnings on necessities. on necessities.

Wealthy people pay taxes on a Wealthy people pay taxes on a smaller proportion of their earnings.smaller proportion of their earnings.

If a wealthy family If a wealthy family and a poor family and a poor family both spend $500 on both spend $500 on groceries per month groceries per month the wealthy family is the wealthy family is spending a smaller spending a smaller proportion of their proportion of their money on groceries. money on groceries.

They will have more They will have more money left over.money left over.

To make sales taxes less regressive To make sales taxes less regressive governments exclude certain items governments exclude certain items from being taxed.from being taxed.

Sales of groceries Sales of groceries and medical and medical supplies are not supplies are not taxed. This helps taxed. This helps the poorer people the poorer people have more money have more money for necessities. for necessities.

Estate Tax-Estate Tax- property left over property left over after a person dies is taxed.after a person dies is taxed.

Social Security Tax-Social Security Tax-

Started in 1935 Started in 1935 employees and employees and workers pay in a workers pay in a combined 15.3 % combined 15.3 % of their checks of their checks and it gets paid and it gets paid back to workers at back to workers at age 62, 67 or 70.age 62, 67 or 70.

TariffTariff- a special kind of - a special kind of import tax.import tax.

A tariff is designed to raise A tariff is designed to raise revenue as well as protect revenue as well as protect American industries. American industries.

When we place a tariff on When we place a tariff on foreighnn products they do the foreighnn products they do the same to us.same to us.

Non Tax revenue for governmentsNon Tax revenue for governments

The government pay rent or lease The government pay rent or lease unneeded lands.unneeded lands.

Toll Booths, Fines for speeding, Toll Booths, Fines for speeding, copyright fees, Lotteries,Sell licensecopyright fees, Lotteries,Sell license

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