1. What crime eventually landed him in prison ?
AL CAPONE
MURDERER
BOOTLEGGER
RACKETEER
What crime eventually landed him in prison ?

2. ANSWER: INCOME TAX EVASION
Capone served 8 years in Alcatraz before he was granted parole in 1939.
He was NOT popular in prison….he was
frequently harassed and bullied by other inmates.

3. Items seized by the IRS

4. Quotes about taxes in the U.S.
“ Did you ever notice that when you put the words “The” and “IRS” together, it spells “THEIRS?” Anonymous
“ You don’t pay taxes, they take taxes.”
Chris Rock

5. “Nothing in life is certain, except for Death and
Taxes.”
- Benjamin Franklin

6. 9.1 The Economics of Taxation
What is the impact of taxes ?
Resource allocation : where do the factors of production go?
Behavior adjustment: taxes can promote good behavior (home ownership) and curb bad behavior (sin taxes on tobacco and alcohol)
Productivity/growth : high taxes stunt growth; low taxes promote growth

7. 3 Criteria for effective taxes
Equity : fairness; avoid loopholes
Simplicity: easy to complete and pay; sales tax is good here; FIT is not
Efficiency: assessed and collected efficiently; FIT does well here

8. Two principles of taxation
Benefit principle
Those who benefit from gov’t good or service should pay for it
Ex : gas tax
Ability to pay principle
People that have more income can afford to pay more
Ex : our personal income tax

9. 3 types of tax structures
Proportional tax: everybody pays the same % of taxes (flat rate)
Progressive tax: higher the income, the higher % of taxes you pay; also tend to be marginal
Regressive tax: lower income earners pay a higher % of income in taxes