Business Taxes By: Jennifer Crowell, Sarah Shelton, Luke Harris, Eddie, Patrick Allen

General Nature of Taxes The type of tax amounts influences business decisions that, in turn, can influence the total amount of business activity in a region and in the nation. Both business and individuals pay many kinds of Taxes to local, state, and federal government. Taxes collected by the federal government amount for about 56% of all taxes collected. Local Taxes collected amount for 44%. Most Corporations pay ½ of their profits in various kinds of taxes.

Reasons For Taxes The government levy taxes mainly to raise revenue to fund new and ongoing programs. Regulate business activity.

Fairness of Taxation The government tries to solve the fairness problem by adopting a proportional, progressive, or regressive policy. Examples: I.Proportional Taxation (AKA Flat Tax): One in which the tax rate remains the same regardless of the amount on which the tax is imposed. II.Progressive Taxation: A tax based on the ability to pay. III.Regressive Taxation: When the actual tax rate decreases as the taxable amount increases.

Types of Taxes Income Tax: A tax on the profits of business or the earnings of individual. Sales Tax: A tax levied on the retail price of goods and services at the time they are sold. Excise Tax: When a sales tax applies only to selected goods or services. Property Tax: A tax on material goods owned. Real Property Tax: a Tax on real estate, which is land and buildings. Personal Property Tax: A tax on possessions that are moveable, such as furniture, machinery, and equipment.

Effect of Taxes on Business Decisions Taxes can influence the accounting method that a business selects to calculate profits and the method used to by managers. Taxes are used as a basis for deciding where to locate a new business or whether to move a business from one location to another.

Activity: Finding Sales Tax Game.html Game.html Multiply the cost by the tax rate and then divide by 100.