Tax types, reading and notes
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This document discusses various types of taxes including income tax, sales tax, property tax, estate tax, and gift tax. It provides examples of tax rates for different income levels in countries like the United States, United Kingdom, Ireland, Mexico, Sweden, and Slovakia. It also gives examples of how to calculate net income based on gross income and tax rates. Key points covered are incentives of different tax structures, complexity of tax codes, and IRS filing requirements in the United States.
Tax types, reading and notes
- 1. Bellringer on your ½ sheet
- 2. “In this world nothing can be said to be certain, except death and taxes.” Benjamin Franklin
- 3. US Federal Tax Rates: (only 3 % of Americans make over $250,000) Add 10 -15 % more depending on which state you work in 3. On your ½ sheet how much in tax would you would pay?
- 4. Gross income: How much you earn Net income: how much you keep Net income = gross income - gross income*tax rate For example: Mr. Klein made $37,500 last year. Net income = $37,500 - $37,500(.25) Net income = $37,500 - $9,375 = $28,125 4. How much is your “net income”?
- 5. Country Corporate Tax rate Income Tax Sales Tax United Kingdom 21-28% 0-40 % 17.5% Ireland 12.5 % 2041% 21 % Mexico 29% 3-29 % 15 % Sweden 28 % 0-59 % 25 % Slovakia 19 % 19 % 19 % Hong Kong 15 % 0-15 % 0% United Arab Emirates 0% 0% 0%
- 6. 1. 2. 3. 4. 5. 3 countries What tax is being discussed? What social problem were they trying to solve? How might this tax create more problems? Share with group What are the four types of taxes mentioned in the articles? AS A GROUP: 5. Suggest two changes each country could make rather than the taxes they imposed.
- 7. According to Adam Smith: Simple to understand Avoid negative incentives Avoid loopholes IRS manual – 70,000 pages (4 X size of the Bible)
- 8. Tax incentives Really, ways to not pay tax “write offs” Thousands of examples: http://blog.turbotax.intuit.com/deductions-and-credi
- 9. IRS – tax collection agency in USA Taxes are deducted throughout year Every citizen must file every year by: If you paid more during the year then you need to: you get a refund If you paid less during the year then you need to: pay the difference
- 10. For example: Mr. Klein made $37,500 last year. Net income = $37,500 $37,500(.25) Net income = $37,500 - $9,375 = $28,125 If Mr. Klein paid $10,375 in 2010, what happens after he files? Why is a BIG refund not such a great idea?
- 11. Progressive Income Tax Tax on a household income % increases b/c income “tax the rich more!” The more you make, the higher your tax % For example: Tax $12/hour labor or accountant $55,000/year Why common in USA & EU Incentive? Income $0-$15,000 Tax Rate 0% $15,001$20,000 10% $20,000$30,000 15% $30,000$50,000 25% $50,000$100,000 33% $100,001 + 38%
- 12. Tax on a household income % of stays the same “flat tax” For example: 5% tax, $25,000/year or $100,000/year Why rare in USA? Incentive?
- 13. Other taxes
- 14. Tax on something you own Usually expensive like your house or boat For example: $100,000 home 5% property tax rate 100,000 X .05 = $5,000 property tax Incentive? 8.01 % ave Pima Co rate
- 15. Smaller % taken the higher your income Sales tax For example: 5% tax, $25,000/year w/$10,000 consumption pays: 10,000 X .05 = $500, or 2% of total income $50,000/year w/$15,000 consumption pays: 15,000 X .05 = $750, or 1.5% of total income Incentive? Why don’t poor people get upset?
- 16. OPTIC
- 19. Tax on real estate, stock sales or dividends, or collectables. Why not only for the rich?
- 20. Tax on gifts or rewards Games shows, gambling, lottery Rate depends on gift 35-60 % Is this a bad incentive?
- 22. Tax on inheritance Sometimes called “death tax” In US today, $2,000,000 and up 55% rate Is this a bad incentive?
- 23. US estate taxes over the years GW Bush worked to repeal in 2001 Came back in 2011 when law expires Barack Obama supports estate tax
- 26. 1040 Form for IRS 1040EZ W2 from employer (s) – shows wages 1099 (other forms for interest, stock income, etc) Plus you must file in every state except: TX, NV, NH, FL, WA.
- 27. Progressive income tax Regressive income tax Proportional income tax IRS deadlines and forms Sales tax Estate tax Property tax Gift tax