1. Taxes and the National Debt
Do we have a fair tax system?

2. History of Taxes
Colonists hated British taxes (Taxation w/o representation)
Articles of Confederation couldn’t tax (Disaster)
Constitution gives power to tax to House of Representatives (most democratic)
Income tax amendment XVI (1913 made taxes more fair)

3. Goals of Taxation
Raise Revenue (The country has to pay it’s bills or does it?)
Influence Behavior (sin tax on cigarettes, deductions for kids)
Be Fair
Regressive –tax the same amount for different incomes
Progressive – higher taxes for higher incomes

7. Types of Taxes
Federal Income Tax

8. Social Security and Medicare

9. Sales Tax, Excise, Property Taxes
7.5% sales tax in Enumclaw
Excise Gas Tax is .60 per gallon / car tabs /etc.
Average person in King County pays $ in property taxes a year.
Lets just estimate that the average person in King County pays approx. 7% in state taxes

11. Investments Taxed much lower (Capital Gains 10%)
Types of Compound Interest investments
Safe = low yield (savings account)
Moderate risk / yield (mutual funds)
High risk / yield (individual stocks)
Investment Calculator

12. Personal Debt Bad debt (The value of the item decreases)
Pay day loans ( % interest rate)
Credit card (15-25 % interest rate)
Auto (3-10% interest rate)

13. Good Debt Helps you generate income or goes up in value
Student loan debt (3-5% interest)
Small Business loans (3-5%)
Home Mortgage (4-6%)

14. National Debt Currently Over 18 trillion Why borrow? Dangers
Keynesian Economics (borrow to stimulate economy)
Lack of will-power (lower taxes but higher spending)
Dangers
People won’t continue to invest
Interest rates go up