1. ECONOMICS Chapter 16.4: Taxation Learning Target: Understand the principles and forms of taxation in the U.S.
Success Criteria
You should be able to…
1. Identify various means the government uses to raise revenue
2. Analyze how the U.S. pays for services including national defense
3. Compare and contrast different forms of taxation

2. What is Tax Freedom Day?
The day when Americans will have earned enough to pay off their total tax bill for the year.
Where does most government revenue come from?
Most local, state, and federal government revenue comes from taxes paid by individuals, businesses, and corporations.

3. What is the benefits-received principle?
A system of taxation where those who use a government service support it with taxes in proportion to the benefit they receive.
Those who do not use a service do not pay tax for it.
Examples: fuel taxes, park admission fees, bridge tolls

4. What is the ability-to-pay principle?
A principle of taxation in which those with higher incomes pay more taxes than those with lower incomes, regardless of the services used.
Example: property taxes – All property owners pay property taxes to support the local schools. Property taxes are based on the value of the home or property.

5. Let’s Review What is Tax Freedom Day?
Discuss at your table.
What is Tax Freedom Day?
Where does the government gets it money?
Explain the benefits-received principle? Give an example.
Explain the ability-to-pay principle? Give an example.
Are you on target (white, black, blue, red or yellow)?
Did you hit the bullseye?
Learning Target: Understand the principles and forms of taxation in the U.S.

6. ECONOMICS Chapter 16.4: Taxation Learning Target: Understand the principles and forms of taxation in the U.S.
Success Criteria
You should be able to…
1. Identify various means the government uses to raise revenue
2. Analyze how the U.S. pays for services including national defense
3. Compare and contrast different forms of taxation

7. What is a proportional tax? (see table on p. 432)
(see table on p. 432)
A tax that takes the same percentage of all incomes. As income rises, the amount of tax paid also rises.
Examples: Sales tax, Property tax, Social Security tax (FICA), Customs duties
What is a progressive tax?
(see table on p. 432)
A tax that takes a larger percentage of higher incomes than of lower incomes (see ability-to-pay principle).
Examples: Federal income tax, Corporate tax, Estate tax, Gift tax

8. Examples: Sales tax (currently 6% in Michigan), Excise (use) tax
What is a regressive tax?
(see table on p. 432)
A tax that takes a larger percentage of lower incomes than of higher incomes.
Examples: Sales tax (currently 6% in Michigan), Excise (use) tax

9. What is an excise tax?
Excise taxes are taxes paid when purchases are made on a specific good, such as gasoline. Excise taxes are often included in the price of the product. There are also excise taxes on activities, such as on wagering or on highway usage by trucks.
Examples: Fuel tax (gas and diesel), Alcohol tax, Cigarette tax 

10. Let’s Review Describe a proportional tax and give an example.
Discuss at your table.
Describe a proportional tax and give an example.
Describe a progressive tax and give an example.
Describe a regressive tax and give an example.
What is an excise tax? Give an example.
Which taxes do you agree with and which do you disagree with?
Are you on target (white, black, blue, red or yellow)?
Did you hit the bullseye?
Learning Target: Understand the principles and forms of taxation in the U.S.

11. ECONOMICS Chapter 16.4: Taxation Learning Target: Understand the principles and forms of taxation in the U.S.
Success Criteria
You should be able to…
1. Identify various means the government uses to raise revenue
2. Analyze how the U.S. pays for services including national defense
3. Compare and contrast different forms of taxation

13. SUCCESS CRITERIA
#WeLoveToLearn