1. Types of Tax Plans
Unit 3 – Taxes – Day 2

2. Tax reform can be approached in a variety of ways
Tax reform can be approached in a variety of ways. Some people worry that new tax plans may only help the rich and not the poor or the middle class. To understand proposed changes in tax plans, we must first understand our current tax plan.

3. Types of Taxes
Flat
Fixed
Graduated

4. Using a flat tax, how much would they pay?
Taxable Income: $5000 Taxable Income: $50,000

5. Using a Fixed Tax, how much would they pay?
Filing Single; Taxable Income: $5000 Filing Single; Taxable Income: $50,000

6. Fixed rate tax plan
Using a fixed rate tax plan, compare the tax paid by someone who earns $91,150 to that paid by someone who earns $91,151.

7. Use the results…
Why is this tax plan is open to criticism and debate.

8. Graduated tax plan
To illustrate a graduated tax plan let the bar below represent your annual taxable income. Let’s say your taxable income is $50,000 and you are single.

9. Calculate the tax paid on the following taxable incomes and filing statuses. Use the bar model to illustrate the graduated rate calculations.
$9000 Single
$15,000 Single
$52,000 Married Filing Jointly
$90,000 Single
$250,000 Married Filing Jointly

10. What do you notice…
…About the total amount of tax in each individual section on the bar model?

11. …our actual tax tables are fairer than the first plan presented.
Explain why…
…our actual tax tables are fairer than the first plan presented.