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Notebook # 29 Economics 9-2

Notebook # 29 Economics 9-2. The Federal Tax System Pages 231-236. The Federal Tax System. Pages 231-236. ESSENTIAL QUESTION : How does the U.S. acquire revenue (money) in order for the government to operate? Why is the federal individual income tax

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Notebook # 29 Economics 9-2

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  1. Notebook # 29Economics 9-2 The Federal Tax System Pages 231-236

  2. The Federal Tax System Pages 231-236 • ESSENTIAL QUESTION: • How does the U.S. acquire revenue (money) in order for the government to operate? • Why is the federal individual income tax • a progressive tax based on income • level? • Why should people be taxed based on their ability to pay taxes? • What are some other sources of government revenue?

  3. The Economics of TaxationPages 231-236 GPS STANDARDS: SSEPF3- Explain how changes in government monetary and fiscal policy can have an impact on an individual’s spending and saving choices. b.) Define ( and explain the impact) of progressive…. taxes

  4. Economics 9-2 • The Economics of Taxation • Pages 231-236 • The federal government raises revenue from a variety of taxes • The most important sources of government revenue are individual income taxes, Social Security taxes, and corporate income taxes.

  5. Economics 9-2 • The Economics of Taxation • Pages 231-236 • The Federal government collects about 48 percent of its revenue from the individual income tax. • Taxes are typically withheld from individual’s paychecks, with employers sending the taxes directly to the Internal Revenue Service.

  6. Economics 9-2 • The Economics of Taxation • Pages 231-236 • Individuals file a tax return on or before April 15 each year; • if taxes withheld are more than the taxes owed, the individual receives a refund; • if not, the individual makes a payment of the tax balance.

  7. Economics 9-2 • The Economics of Taxation • Pages 231-236

  8. Economics 9-2 • The Economics of Taxation • Pages 231-236 • The individual income tax is a progressive tax because individuals earning higher incomes pay higher tax rates.

  9. Economics 9-2 • The Economics of Taxation • Pages 231-236 • Why do you think some Americans call the Social Security tax the “tax of the middle and lower classes? • It is a partly regressive tax, these economic classes bear more of the burden of Social Security taxes than the wealthy class.

  10. Economics 9-2 • The Economics of Taxation • Pages 231-236 • The Federal Insurance Contributions Act (FICA) tax pays for Social Security and medicare. • FICA it is the second largest source of government revenue.

  11. Economics 9-2 • The Economics of Taxation • Pages 231-236 • Corporations pay a tax on their profits because they are considered legal entities. • Corporations tax is the third largest source of government revenue.

  12. p. 231-236

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