Types of Taxes Chapter 11.

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Presentation transcript:

Types of Taxes Chapter 11

Federal, State & Local Taxes Federal Income Taxes Social Security Taxes Medicare Taxes State Income Taxes Sales Tax Excise Tax Property Taxes Local Taxes

Types of Taxes Progressive Tax- Regressive Tax- Proportional Tax As income ↑ => Average Tax Rate ↑ Example: U.S. Federal Income Tax Regressive Tax- As income ↑ => Average Tax Rate ↓ Example: Gasoline Tax, Bridge Tax Proportional Tax Regardless of income level => Average Tax Rate unchanged Example: Flat Income Tax, Corporate Taxes Excise Tax Flat rate per unit => paid at purchase Example: Gasoline ($0.50 per gallon), cigarettes (over $200 per pack) (both are also regressive taxes) Some taxes can be two types!

Plus $1.01 per pack Federal Tax! Excise Taxes Plus $1.01 per pack Federal Tax!

Tax Reading

2014 California State Income Tax 2013 - 2014 Tax Bracket (Single) Marginal Tax Rate $0+ 1.00% $7,582+ 2.00% $17,976+ 4.00% $28,371+ 6.00% $39,384+ 8.00% $49,774+ 9.30% $254,250+ 10.30% $305,100+ 11.30% $508,500+ 12.30%

2013 Federal Tax Rate Brackets Bush Tax cuts are now permanent Single Married filing Jointly or Qualifying Widow(er) 10% Up to $8,925 Up to $17,850 15% $8,926 – $36,250 $17,851 – $72,500 25% $36,251 – $87,850 $72,501 – $146,400 28% $87,851 – $183,250 $146,401 – $223,050 33% $183,251 – $398,350 $223,051 – $398,350 35% $398,351 – $400,000 $398,351 – $450,000 39.6% $400,001 + $450,001 + Standard Deduction $6,100 $12,200 Bush Tax cuts are now permanent New top bracket

2 Wage Earners $151,026 Federal Taxes $5,855 $7,254 Social Security John earns $500,000 Mary earns $60,000 $151,026 $7,254 $9,995 $52,830 $277,922 $23,160 $222,078 44.0% Federal Taxes Social Security Medicare California Tax Yearly Bring Home Pay Monthly Bring Home Pay Total Taxes Paid Overall Tax % Rate $5,855 $2,520 $870 $1,617 $49,137 $4,094 $10,863 18.0% http://www.paycheckcity.com/calculator/netpay/us/california/calculator.html

Who Pays Federal Income Taxes Top 1% of Taxpayers Pay 38% of all taxes Earn 20% of all income 1.4 million households $343,000 + Up Top 10% of Taxpayers Pay 70% of all income taxes Earn 46% of income Bottom 50% of Taxpayers Pay 3% of Income Taxes Earn 13% of Income Below $33,000 ($16/hour working full time)

Death of Middle Class? http://www.pbs.org/newshour/bb/business/july-dec12/makingsense_10-16.html

Basic Income http://www.pbs.org/newshour/making-sense/why-americas-favorite-anarchist-thinks-most-american-workers-are-slaves/