“Taxes are what we pay for civilized society” Oliver Wendell Holmes Jr., 1904

Taxes Fund Public Goods and Services National Defense State and Local Police Financial Aid Health Care for Elderly Public Education Social Services

Cooking Oil, Foreigners, Slaves (Ancient Egypt) Early Taxes Sales, Inheritance, Imports, Exports (Ancient Rome) Beards, Beehives, Boots, Souls (Russia, 1702) Bachelors (England, 1695; Missouri, 1820)

American Revolution caused debt The Power to Collect Taxes Tax was necessary to pay debt Article 1, Section 8 of the U.S. Constitution granted Congress power to tax

The Federal Government Dollar- Where It Comes From Excise, Customs, Estate, Gift, and Miscellaneous Taxes 7% Personal Income Taxes 43% Social Security, Medicare, and Unemployment and other Retirement Taxes 35% Corporate Income Taxes 7% Borrowing to Cover Deficit 8%

The Federal Government Dollar- Where It Goes Law Enforcement and General Government 3% Social Security, Medicare, and other Retirement 38% National Defense, Veterans, and Foreign Affairs 20% Social Programs 21% Physical, Human, and Community Development 10% Net Interest on the Debt 8%

How Taxes Evolve House Ways and Means Committee Full House Senate Finance Committee Full Senate Joint Conference Committee Senate/House Compromise bill President vetoes bill Tax law enacted President signs bill Veto override fails Veto override passes

Each person is responsible for filing a tax return. Voluntary Compliance

Tax Avoidance versus Tax Evasion Tax Evasion: Failure to pay legally due taxes Tax Avoidance: Legal means of decreasing your tax bill

Information on taxpayer returns is private Taxpayer Rights Taxpayers have the right to appeal an IRS decision

“The income tax law is a lot of bunk. The government can’t collect legal taxes from illegal money.” Al Capone

Typical UT Family What is the median-income for the typical UT family? –$57,000 Taxes consumed almost 26 cents for every dollar they earned.

Typical Taxes for a UT family Social Security State Income State/Local Medicare Property Auto/gas Employment Excise Federal $7,155 $1,831 $1,805 $1,673 $1,437 $913 $553 $281 $230

How many hours out of an 8 hour work day is needed to pay taxes? 2 Hours and 3 minutes.

Who gets the greatest part of the UT family’s property tax? The School District