Taxes

Some things you need to know… Marginal vs. Avg tax rate Avg. tax rate = Tax $ / total income Marginal tax rate= how much each additional $ in income will cost you in taxes Federal tax rates Wisconsin tax rates Tax Benefits of Marriage GINI Co-efficient – a measure of the equality of distribution of income – between 0-1 the closer to 0 it is the more equally distributed the income- the higher it is the more inequitable the economy is. Progressive Tax – the more you make - the more you pay Proportional Tax – the amount of taxes is the same percentage of income across the board Regressive Tax- the tax is a fixed amount regardless of income, but the tax burden is heaviest on the lowest incomes.

Some things you need to know… Tax Deductions – circumstances that allow you to reduce the amount of income that is being taxed. Home Owners- deduct interest paid on mortgages Dependents – the more you list on your payroll the more money you get now- but you might have to pay when you file Child Tax Credit - $1000 per child Some Child Care Credits too Cap on Social Security Tax Currently only the first $117,000 a year is taxed- anything over that is SSI tax free- higher earners pay less- Fair? Income vs Wealth – not just income- how long you could sustain your standard of living and pay your bills if your income changed The Tax Game