1. Topic: Taxes  Boo **Turn in your assignment “The Politics of Disenfranchisement.” If it is not done within the first 10 minutes of class it is late. Warm-up: Define the following terms: 1. Progressive tax, 2. Tax return, 3. Payroll tax, 4. Regressive tax, 5. Excise tax, 6. Estate tax, 7. Gift tax, and 8. Custom duty. Small Group

2.  How and why did the Constitution give Congress the power to tax?  List the most significant federal taxes collected today (evidence).  Summarize why the Federal Government imposes taxes for nonrevenue purposes.  Make sure you read over 16.2 for Monday.

3.  Article I, Section 8, Clause 1 of the Constitution grants Congress the power to tax.  The Sixteenth Amendment gives Congress the power to levy an income tax. Limits on the Power to Tax The power to tax is also limited through the Constitution. According to the Constitution: 1. Taxes must be used for public purposes only. 2. Federal taxes must be the same in every State. 3. The government may not tax exports.

4. 2222 3333 Individual Income Tax  Individual income taxes regularly provide the largest source of federal revenue.  The tax is levied on each person’s taxable income. Corporation Income Tax  Each corporation must pay a tax on its net income, that is, on the earnings above the costs of doing business. The Income Tax The income tax is the largest source of federal revenue today. The tax is also a progressive tax, that is, the higher the income and the ability to pay, the higher the tax rate.

5. There are three main types of social insurance taxes levied: OASDI The Old-Age, Survivors, and Disability program is the basic Social Security program. Medicare Medicare is health insurance for the elderly and part of the Social Security program. Unemployment Compensation The unemployment compensation program pays benefits to jobless workers and is also part of the overall Social Security program.

6. Excise Taxes An excise tax is a tax laid on the manufacture, sale, or consumption of goods and/or the performance of services. Custom Duties A custom duty is a tax laid on goods brought into the U.S. from abroad. Estate and Gift Taxes An estate tax is a levy imposed on the assets (estate) of one who dies. A gift tax is one imposed on the making of a gift by a living person.

7.  Besides taxing for revenue purposes, the Federal Government sometimes taxes for the purpose of regulating and even discouraging some activity that Congress thinks is harmful or dangerous to the public.  The Supreme Court has upheld Congress’s taxing for nonrevenue purposes.  However, the Supreme Court can still rule a tax unlawful if it finds that the tax was imposed for improper reasons.