2. Bell ringer:
Write down what you think of when you hear the word taxes/tax
Think of the following questions
What do taxes consist of?
Who pays taxes?
To whom?

3. At your table come up with a 1 sentence summary about taxes, using your bell ringer

4. Taxes are a necessary part of life in the United States.
“Taxes are what we pay for civilized society” Oliver Wendell Holmes Jr., 1904
Taxes are a necessary part of life in the United States.
Although taxation has often received a less than favorable review by
taxpayers, the benefits of taxation are positive.
What do you think is meant by this quote? Do you agree with it?
(Answers will vary.)

5. In this photo-list places where tax dollars are used.

6. Taxes Fund Public Goods and Services
Health Care for Elderly
National Defense
Social Services
Taxes are required payments of money to various levels of government.
Taxes provide revenue for public goods and services that benefit the
community and the nation as a whole, such as
our national defense,
state and local police and protection agencies,
health care,
public education,
financial aid for the disabled and unemployed, and
social services for low-income families.
The amount of revenue raised by taxes determines the amount of
services the government can afford to provide.
State and Local Police
Public Education
Financial Aid

7. Taxes are required payments of money to various levels of government.
Taxes provide revenue for public goods and services that benefit the community and the nation as a whole.
What are some things that taxes pay for?

8. Early Taxes Cooking Oil, Foreigners, Slaves (Ancient Egypt)
Sales, Inheritance, Imports,
Exports (Ancient Rome)
Beards, Beehives, Boots,
Souls (Russia, 1702)
Throughout history, taxation has been a powerful means of shaping
civilization.
Ancient Egyptians were known to tax all aspects of daily life.
Egyptians taxed foreigners, slaves, and the use of cooking oil necessary for preparing family meals.
Egyptians often were forced into slavery when taxes became too high to pay.
Roman governments had an advanced system of taxation, which
included taxes on sales, inheritance, imports, and exports.
The Roman emperor Vespasian was famous for his liberal use of taxation.
He imposed the Fiscus Judaicus, which was a tax on Jews.
In addition, he taxed the urine that was used in cleaning and tanning leather.
Peter the Great of Russia taxed hats, boots, beehives, basements,
chimneys, food, clothing, birth, marriage and burial in addition to taxing
beards and souls.
Even bachelors were taxed in England and the state of Missouri!
Bachelors (England,
1695; Missouri, 1820)

9. The Power to Collect Taxes
American Revolution
caused debt
Tax was necessary
to pay debt
Article 1, Section 8 of
the U.S. Constitution
granted Congress
power to tax
The American Revolution put our nation in a great deal of debt.
To pay this debt and to meet the needs of the United States citizens, the
framers of the Constitution in Article 1, Section 8, granted Congress the
powers to tax.

10. The Sixteenth Amendment
The income tax levied at the time of the Civil War was short-lived. Soon
after, this tax was found to be unconstitutional.
It wasn’t until 1913 that Congress was given the power to tax in the
Sixteenth Amendment.
After Congress was given the power to tax the people, a federal income
tax was put into place.
Funding from this tax has helped reduce our nation’s debt and provide
support for public services to benefit all in our nation.

11. The Federal Government Dollar- Where It Comes From
PAYROLL TAXES:
Social security, Medicare,
and unemployment and other retirement taxes.
35%
Personal
Income Taxes
50%
Excise, customs, estate, gift, and miscellaneous Taxes 8%
Slide 3 – where the money goes (public goods/services)
Where does it come from?
The Personal income tax is the most significant means of raising revenue in the
federal government.
Payroll taxes, such as Social Security, Medicare, unemployment, and
other retirement taxes (FICA), account for the second largest source of
federal revenue through taxation.
Excise, estate, gift, and corporate income taxes, as well as customs,
borrowing to cover deficit, and miscellaneous taxes raise the rest of the
revenue needed by the federal government
Corporate
Income Taxes 7%

12. The Federal Government Dollar- Where It Goes
Social Security, Medicare and
other Retirement
36%
Surplus to Pay Down
the Debt 6%
Law Enforcement and General Government 2%
National Defense,
Veterans and
Foreign Affairs
18%
Again, Slide 3 showed us a little where our taxes go.
More specifically:
Social Security, Medicare, and other retirement programs make up
the largest payout by the federal government. These programs
Provide income support for the retired and disabled and medical
care for the elderly.
National defense, veterans, and foreign affairs are the next largest
expenditure. Money is provided to equip, modernize, and pay our armed
forces and to fund other national defense activities.
A portion of this funding is allotted for veteran’s benefits and services. About 1 percent of this money is given to foreign countries and United States embassies abroad to provide military and economic assistance and maintenance.
Social programs, such as Medicaid, food stamps, aid to families with
dependent children, health research, public health programs, assisted
housing, and social services are funded by revenue raised by taxes.
Law enforcement, general government activities (including the collection
of taxes), judicial activities, and prisons account for a small percentage
of expenditures.
Social Programs
18%
Physical, Human, and
Community Development
10%
Net Interest on
the Debt,
10%

13. Types of taxes
1. Regressive
2. Progressive
3. Proportional

14. Do you think these taxes are fair to all people?
Regressive
Everyone pays the
same fixed amount
Do you think these taxes are fair to all people?

15. As a group on a piece of paper
How would a $2,000 tax on all citizens affect the following people:
a lifeguard ($8000)
an automotive technician ($40,000)
a mail carrier ($50,000)
a doctor ($100,000)
Show what percentage of each person's income would go toward the $2,000 tax

17. Higher Income = Higher Taxes
Progressive Taxes
Higher Income = Higher Taxes

18. proportional tax
A tax that takes the same percentage of income from all income groups.

19. With your group copy down the #’s and fill in the correct information on the same piece of paper1. 2. 3. 4. 5.

20. Which picture is a regressive tax, proportional tax, and a progressive tax?
Houses=proportional
Regressive=gas
Progressive=wealth

21. What types of things are taxed?

22. Transaction Taxes Levied on economic Transactions Support state and
local services
Set on percentages or
physical quantities

23. Property Tax Levied on property, especially real estate
Fund schools, local
services, welfare programs
Can also be levied on
boats, RVs, business inventories

24. State Income Taxes Come from earned and unearned income
Levied on individuals and corporations
Support state expenses, education
programs, and welfare

25. Voluntary Compliance
Each person is responsible for filing a tax return.
In the United States, taxation operates under a system of
voluntary compliance. (3rd video)
Simply stated, this means that taxpayers are responsible for declaring all of their income.
obtaining the necessary forms and instructions, provide complete information,
and file their returns on time.
Unless each taxpayer declares and pays his or her fair share, government services will suffer
and honest taxpayers will end up paying more. Ways to do this are 

26. Voluntary Compliance Keep necessary records Report income accurately
Correctly calculate tax liability
File returns
on time
The U.S. tax system today depends on voluntary compliance.
It is the responsibility of taxpayers to keep the necessary records to help
them report their income freely and voluntarily, to correctly calculate their
tax liability, and to file their tax returns on time.
Taxpayers voluntarily follow the steps the tax system lays out.
Failure to do so can result in penalties.

27. People Don’t Pay, Not a Happy Day!
worksheet

28. What day are taxes
due?

29. April 17th-tomorrow 
-Traditionally the 15th

30. Happy Tax Day
Bell ringer:
What do you need to file your taxes?

31. Pay-As-You-Go Withholding
Taxes are paid as income is earned
Taxes are withheld based on Form W-4 information
Most taxpayers pay their taxes through a “pay-as-you-go,” or “pay-as-
you-earn” system of withholding.
In the “pay-as-you-go” system, taxes are paid as income is earned or
received during the year.
An employer withholds taxes based on wages paid and the information
provided by the employee on his or her W-4 Form.

32. Filling your taxes This is done on a W-4 form
This determines federal tax withholding

33. Financial Record Keeping
Save:
Paycheck stubs
Bank statements
Completed tax returns and forms
Warranty information
Receipts
Credit card statements
What to Save:
Paycheck stubs, statements of interest or dividends earned, records of
gifts, tips, and bonuses
Copies of completed tax returns along with forms such as your W-4
and W-2
Spending records such as canceled checks, cash register receipts,
credit card statements
Car purchase and lease information
Warranty information, car repair receipts
Medical and education expenses
Rent receipts, home’s title, deed of purchase, mortgage contract, major
home repair and improvement receipts
Receipts from donations or charities

34. Filing taxes 1040EZ form-Tax form for people who earn under $100,000 and have no dependents

35. Where to store? Scan in important documents as PDF File cabinets
Organized by month, job, or expense

36. What % of your pay check is taken up by taxes
Out of your paycheck
4.2% goes to social security
1.45% goes to medicare
TOTAL: 5.65%

37. Angela Viviano earns $2,000 a month as a physical therapist's assistant. In addition to payroll taxes and income tax withholding, her employer withholds $50 for her retirement account. Angela's net pay is calculated as follows:
Gross pay $2,000.00
Social Security tax (4.2 percent of gross pay) -$84.00
Medicare tax (1.45 percent of gross pay) -$29.00
Income tax (per Form W-4) -$220.00
Retirement -$50.00
Net pay $1,617.00
Angela earns $2,000 and receives $1,617.
Her employer sends $333 ($84 + $29 + $220) to the federal government and $50 to the retirement fund.

38. Tax Avoidance versus Tax Evasion
Failure to pay legally due taxes
Tax Avoidance:
Legal means of decreasing your tax bill
Two issues involved with voluntary compliance are tax evasion and tax avoidance.
Tax evasion is the failure to pay legally due taxes.
In this form of underground economy, people fail to report income to the government.
This reduces the government’s revenue and the filer’s tax bill. This form of tax cheating is difficult to measure.
It is estimated that taxpayers voluntarily pay only 80 percent of their legally owed taxes.
Tax avoidance is a legal means of decreasing your tax bill.
Examples of tax avoidance would be moving a business to a state with lower taxes,
taking advantage of tax loopholes, or changing spending habits to avoid paying tax on certain items.
The distinction between tax avoidance and tax evasion is knowing
and taking legitimate deductions and credits when appropriate.

39. Taxpayer Rights Information on taxpayer’s returns is private
Taxpayers have the right to appeal an
IRS decision
Taxpayers have the right to privacy. Information on returns is private and
confidential and can only be examined by authorized tax personnel.
Taxpayers have the right to appeal an IRS decision through the IRS
or a court.

40. Should everyone pay taxes? Why or why not?
If taxes went away what are some things that would leave with them?

41. Many people would not be able to afford school
Many people would not be able to afford school. A high percentage of the people in our communities would be illiterate.
Roads and other infrastructure would be in good condition in rich areas, but perhaps nonexistent in areas where poor people lived.
Sanitation would be spotty, so disease would spread.

42. Does everyone file their own taxes?

43. Should you do your own taxes article

44. “The income tax law is a lot of bunk
“The income tax law is a lot of bunk. The government can’t collect legal taxes from illegal money.”
Failure to pay legally owed taxes can result in fines or imprisonment for
tax fraud or tax evasion.
Al Capone, a man remembered as one of the most notorious criminals of the twentieth century, was imprisoned for tax evasion in June, 1930.
Spiro Agnew, our thirty–ninth vice president (1969–1973), resigned from office after being fined for tax evasion.
Be smart: Pay all taxes owed to the government!
Photo Credit: National Archives
Al Capone

45. Below are taxpayers' comments about voluntary compliance and the IRS's responses. Match each comment with the correct response.
TAXPAYER COMMENTS
IRS RESPONSES
1.IRS publications state that the tax system is voluntary.
A.The requirement to pay is not voluntary. It is explained in the Internal Revenue Code.
                            
                                     
2.The government doesn't have the right to force me to pay my taxes and charge me penalties for not paying taxes.
B.Congress gave the Secretary of the Treasury the power to enforce the income tax laws through involuntary collection.
3.I don't have to pay taxes because payment is voluntary.
C.A taxpayer is required to obey the tax laws, even if he or she does not agree with them.
4.I don't agree with the tax laws, so I don't have to pay what I owe.
D.In IRS publications, the word voluntary refers to the system of allowing taxpayers to determine their taxes and file their forms on their own rather than having the government do this for them.
1=D
2=B
3= A
4=C