TAXES NOTES

I. Types of taxes A. Excise tax – tax is included in price of product ex: gasoline B. property tax – tax on property 1. real property – land or buildings 2. personal property – movable objects (car, jewelry, etc..) C. property taxes are collected by local governments (county / city) 1. property taxes are used for local services (schools, police, parks, etc…) D. sales tax – tax on purchased products 1. In NC, it’s 7 cents on the dollar 2. sales tax is a state tax E. income tax – tax on money earned 1. income tax is collected at both 2. the state and federal level (but not ALL states) 3. this is the #1 form of income for state of NC and federal gov’t F. luxury tax – tax on luxury items (boats, cars, jewelry) G. inheritance tax – tax on inherited items

II. Progressive tax v. Regressive tax A. progressive – a type of tax that affects higher income people more than lower income 1. income tax, luxury tax, property tax are examples B. Regressive tax - a tax that affects lower income people more than higher income 1. it’s a flat tax; everyone pays the same (it’s just more of a burden to lower income people) 2. example is sales tax

III. Other crap A. public good – things provided by the gov’t through our tax dollars B. budget surplus – this is money leftover after paying all expenditures C. budget deficit – after expenditures, you still owe money (you in the hole) D. zoning – property boundaries as it pertains to building E. annex – extending city limits to include new neighborhoods 1.purpose is to increase city tax base

IV. Who collects state and federal taxes A. federal taxes – IRS (Internal Revenue Service) B. state taxes – NC Department of Revenue

V. Review Agencies A. FDIC – Federal Deposit Insurance Corporation – insures money in banks B. DEA – Drug Enforcement Agency C. Others – SEC, FBI, FDA, EPA, IRS, OSHA, FTC, CPSC