Current Event
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Transcript of Current Event
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Current EventCurrent Event
The Air CarThe Air Car Factories will likely be up and Factories will likely be up and
running to make these cars around running to make these cars around 2011.2011.
Compressed air is used to drive Compressed air is used to drive pistons instead of combusting gas.pistons instead of combusting gas.
A small gas-powered motor in the car A small gas-powered motor in the car runs an air compressor.runs an air compressor.
But you can go 60 miles on a single But you can go 60 miles on a single tank of compressed air. tank of compressed air.
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The cars will cost around $20,000.The cars will cost around $20,000. The Chevy Volt out in November is The Chevy Volt out in November is
expected to cost in the mid to high 30s.expected to cost in the mid to high 30s. A tax credit of around $7500 will apply to A tax credit of around $7500 will apply to
both.both.
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Percentages (A Review)Percentages (A Review) Percent means “per one hundred”.Percent means “per one hundred”. 10% means 10/100.10% means 10/100. Which also means 1/10.Which also means 1/10. If you have a calculator, you can divide If you have a calculator, you can divide
tax amount by income. tax amount by income. Person A makes $50, pays $5 in taxes.Person A makes $50, pays $5 in taxes. Person B makes $25, pays $5 in taxes.Person B makes $25, pays $5 in taxes. What percent of their income did each What percent of their income did each
pay?pay?
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Problem #1Problem #1
Joe Dirt earned $20,000 in 2008. He Joe Dirt earned $20,000 in 2008. He paid $6,000 in income taxes.paid $6,000 in income taxes.
Ritchie Rich earned $250,000 that Ritchie Rich earned $250,000 that year. He paid $6,000 in income taxes.year. He paid $6,000 in income taxes.
A) What percent of his income did Joe A) What percent of his income did Joe pay?pay?
B) What percent of his income did B) What percent of his income did Ritchie pay?Ritchie pay?
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Problem #2Problem #2
Joe Dirt earned $20,000 in 2009. He Joe Dirt earned $20,000 in 2009. He paid $2,000 in income taxes.paid $2,000 in income taxes.
Ritchie Rich earned $250,000 that Ritchie Rich earned $250,000 that year. He paid $25,000 in income year. He paid $25,000 in income taxes.taxes.
A) What percent of his income did Joe A) What percent of his income did Joe pay?pay?
B) What percent of his income did B) What percent of his income did Ritchie pay?Ritchie pay?
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Problem #3Problem #3
Joe Dirt earned $20,000 in 2010. He Joe Dirt earned $20,000 in 2010. He paid $2,000 in income taxes.paid $2,000 in income taxes.
Ritchie Rich earned $250,000 that Ritchie Rich earned $250,000 that year. He paid $62,500 in income year. He paid $62,500 in income taxes.taxes.
A) What percent of his income did Joe A) What percent of his income did Joe pay?pay?
B) What percent of his income did B) What percent of his income did Ritchie pay?Ritchie pay?
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Problem #4Problem #4 Joe Dirt earned $20,000 in 2010. He was living Joe Dirt earned $20,000 in 2010. He was living
paycheck to paycheck, & couldn’t afford to save paycheck to paycheck, & couldn’t afford to save any money.any money.
Ritchie Rich earned $250,000 that year. He saved Ritchie Rich earned $250,000 that year. He saved 50% of his income.50% of his income.
Sales tax in their state is 7% on all purchases.Sales tax in their state is 7% on all purchases. A) How much money did Joe pay in sales taxes?A) How much money did Joe pay in sales taxes? B) How much money did Ritchie pay in sales B) How much money did Ritchie pay in sales
taxes?taxes? C) What percent of his income did Joe pay in C) What percent of his income did Joe pay in
sales tax?sales tax? D) What percent of his income did Ritchie pay in D) What percent of his income did Ritchie pay in
sales tax?sales tax?
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Look at your paper. Which Look at your paper. Which income tax system do YOU income tax system do YOU
think is most fair?think is most fair?
A) Problem 1A) Problem 1 B) Problem 2B) Problem 2 C) Problem 3C) Problem 3
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Regarding income taxRegarding income tax
A) everyone should pay the same A) everyone should pay the same percent of their income.percent of their income.
B) the wealthy should pay a higher B) the wealthy should pay a higher percent of their income than the percent of their income than the poor.poor.
C) the poor should pay a higher C) the poor should pay a higher percent of their income than the percent of their income than the wealthy.wealthy.
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Look at your paper. Which Look at your paper. Which income tax system is most like income tax system is most like
our actual income tax?our actual income tax?
A) Problem 1A) Problem 1 B) Problem 2B) Problem 2 C) Problem 3C) Problem 3
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Who would be hurt MORE by a Who would be hurt MORE by a higher sales tax?higher sales tax?
A) JoeA) Joe B) RitchieB) Ritchie
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I think the dumbest tax is theI think the dumbest tax is the
A) sales taxA) sales tax B) income taxB) income tax C) property taxC) property tax D) excise tax (taxes on specific D) excise tax (taxes on specific
things like cigarettes, alcohol, things like cigarettes, alcohol, gasoline)gasoline)
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I think the best tax is theI think the best tax is the
A) sales taxA) sales tax B) income taxB) income tax C) property taxC) property tax D) excise tax (taxes on specific D) excise tax (taxes on specific
things like cigarettes, alcohol, things like cigarettes, alcohol, gasoline)gasoline)
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Should the government tax Should the government tax unhealthy foods (soda, fast unhealthy foods (soda, fast food, donuts, etc.) to keep food, donuts, etc.) to keep health care costs down?health care costs down?
A) Yea!A) Yea! B) Nay!B) Nay!
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Right now, I believe the Right now, I believe the government shouldgovernment should
A) cut taxes and cut spending.A) cut taxes and cut spending. B) cut taxes and leave spending B) cut taxes and leave spending
unchanged.unchanged. C) cut taxes and increase spending.C) cut taxes and increase spending. D) raise taxes and cut spending.D) raise taxes and cut spending. E) raise taxes and leave spending E) raise taxes and leave spending
unchanged.unchanged. F) raise taxes and increase spending.F) raise taxes and increase spending.
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Say the government decides to Say the government decides to tax prescription drug companies tax prescription drug companies for each sale they make. Who is for each sale they make. Who is
hurt most by that tax?hurt most by that tax?
A) The drug makers.A) The drug makers. B) The drug buyers.B) The drug buyers.
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Types of TaxesTypes of Taxes
Proportional tax - everyone pays same percentage of income (Medicare, 1.45%).
Progressive tax - higher percentage of total income paid by people with higher incomes (income tax).
Regressive tax - higher percentage of total income paid by people with lower incomes (sales tax).
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Why progressive??Why progressive??
Marginal utilityMarginal utility Income inequalityIncome inequality
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$10,000 $10,000 incomeincome $1,000,000 $1,000,000 $10,000 $10,000 spendsspends $800,000 $800,000 $700 $700 7% sales tax paid7% sales tax paid $56,000 $56,000 7%7% percent of total income paid percent of total income paid 5.6%5.6% Poor guy pays higher Poor guy pays higher percentpercent of his income than of his income than
rich guy in sales tax!rich guy in sales tax!
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ProblemsProblems 5) I make $20,000/yr and pay $4,000 in taxes.
You make $100,000/yr and pay $10,000. What kind of tax is this?
6) I make $80,000/yr and pay $24,000 in taxes. You make $25,000 and pay $2,500. What kind of tax is this?
7) I make $150,000/yr and pay $30,000 in taxes. You make $200,000/yr and pay $40,000. What kind of tax is this?
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Personal Income Taxes
½ of the federal revenue.
Depending on amount withheld from checks, you could owe or get a refund.
progressive
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2010 Income Tax Rates
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2010 Income Tax Rates
$4,681.25=837.50+[15% X (34,000-8,375)]$4,681.25=837.50+[15% X (34,000-8,375)]
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A guy who made $1,000,000 last year paid...
Step 1: $1,000,000 - $373,650 = Step 1: $1,000,000 - $373,650 = $626,350 $626,350
Step 2: 0.35 X $626,350 = $219,222.50Step 2: 0.35 X $626,350 = $219,222.50 Step 3: $219,222.50 + $108,421.25 = Step 3: $219,222.50 + $108,421.25 =
$327,643.75 in taxes$327,643.75 in taxes
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8) The average high school teacher salary is $43,000 a year.
How much does the average teacher pay in income taxes??
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These dollar amounts get a little bigger every year. Why is that?
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Tax IncentivesTax Incentives
College educationCollege education Healthy lifestyleHealthy lifestyle Save and/or invest your moneySave and/or invest your money Make your home more energy Make your home more energy
efficient/buy a more energy efficient efficient/buy a more energy efficient carcar
Buy a homeBuy a home Have babiesHave babies Some Tax IncentivesSome Tax Incentives
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Current Event(s)Current Event(s)
Proposed Tax on Sugary Beverages Proposed Tax on Sugary Beverages Debated Debated – President Obama has said it is worth President Obama has said it is worth
considering.considering.– Coca-Cola calls the idea outrageous.Coca-Cola calls the idea outrageous.– It’s estimated that a penny/ounce tax on It’s estimated that a penny/ounce tax on
sugary beverages would raise $14.9 billion sugary beverages would raise $14.9 billion in its first year.in its first year.
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Last June, the soft drink industry Last June, the soft drink industry created an organization called “created an organization called “Americans Against Food TaxesAmericans Against Food Taxes”.”.
AAFT bought a full-page ad in the AAFT bought a full-page ad in the Washington Post last Sunday, and Washington Post last Sunday, and has been running commercials on has been running commercials on CNN, MSNBC, and Fox News.CNN, MSNBC, and Fox News.
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4. Which is most closely associated 4. Which is most closely associated with a progressive tax?with a progressive tax?
A) sales taxA) sales tax B) property taxB) property tax C) MedicareC) Medicare D) income taxD) income tax
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7. Person A earns $20,000/yr & 7. Person A earns $20,000/yr & pays $2,000 in taxes. Person B pays $2,000 in taxes. Person B
earns $100,000/yr & pays $10,000. earns $100,000/yr & pays $10,000. The tax they both paid was a:The tax they both paid was a:
A) Sin TaxA) Sin Tax B) Progressive TaxB) Progressive Tax C) Regressive TaxC) Regressive Tax D) Proportional TaxD) Proportional Tax
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8. Person A earns $20,000/yr & 8. Person A earns $20,000/yr & pays $2,000 in taxes. Person B pays $2,000 in taxes. Person B
earns $100,000/yr & pays $15,000. earns $100,000/yr & pays $15,000. The tax they both paid was a:The tax they both paid was a:
A) Sin TaxA) Sin Tax B) Progressive TaxB) Progressive Tax C) Regressive TaxC) Regressive Tax D) Proportional TaxD) Proportional Tax
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9. 9. I make $50,000/yr and pay $10,000 in taxes. You make
$100,000/yr and pay $15,000. What kind of tax is this?
A) Sin TaxA) Sin Tax B) Progressive TaxB) Progressive Tax C) Regressive TaxC) Regressive Tax D) Proportional TaxD) Proportional Tax
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10. 10. I make $20,000/yr and pay $4,000 in taxes. You make
$100,000/yr and pay $10,000. What kind of tax is this?
A) Sin TaxA) Sin Tax B) Progressive TaxB) Progressive Tax C) Regressive TaxC) Regressive Tax D) Proportional TaxD) Proportional Tax
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FICA TaxesFICA Taxes
Social Security, Medicare (elderly/disabled).
SS proportional (6.2%) up to $107k; not paid above that. So it’s ultimately REGRESSIVE.
Medicare 1.45%
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Are We Overpaying Grandpa?Are We Overpaying Grandpa? As baby-boomers retire, As baby-boomers retire,
more social security more social security checks are going out.checks are going out.
People are living longer, People are living longer, and collecting SS longer.and collecting SS longer.
Gov’t SS & health Gov’t SS & health programs for the elderly programs for the elderly spend about $40k/yr on spend about $40k/yr on average per elderly average per elderly American.American.
That’s equal to the That’s equal to the average American’s average American’s annual income.annual income.
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II. FICA TaxesII. FICA Taxes
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III. Corporate Income TaxesIII. Corporate Income Taxes3rd biggest source of revenue.
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ListenListen
Basic corporate income tax brackets:
15% up to $50k25% between $50k &
$75k34% $75k & up
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V. State Gov’t Revenue SourcesV. State Gov’t Revenue Sources
11stst -Federal gov’t -Federal gov’t 22ndnd -Sales tax -Sales tax 33rdrd -State income tax (progressive) -State income tax (progressive)
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VI. Local Gov’t Revenue SourcesVI. Local Gov’t Revenue Sources
11stst -State and Federal Gov’t -State and Federal Gov’t 22ndnd -Property taxes -Property taxes
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The Flat Tax - ListenThe Flat Tax - Listen
Advantages:Advantages: SimpleSimple Would eliminate Would eliminate
loopholesloopholes By reducing need By reducing need
for the IRS and for the IRS and accountants, could accountants, could save up to $100 save up to $100 billion per yearbillion per year
Disadvantages:Disadvantages: Removes behavior Removes behavior
incentives of incentives of current tax codecurrent tax code
Benefits the Benefits the wealthy at the wealthy at the expense of the expense of the poor.poor.
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Where They Get Their Money FromWhere They Get Their Money From
Federal GovernmentFederal Government– 1:personal income tax 1:personal income tax
(progressive)(progressive)– 2:FICA2:FICA
Social Security (6.2%, Social Security (6.2%, capped at $102k)capped at $102k)
Medicare (1.45%, Medicare (1.45%, proportional)proportional)
– 3:corporate income 3:corporate income tax (progressive)tax (progressive)
State GovernmentsState Governments– 1:Federal Government1:Federal Government– 2:sales tax (regressive)2:sales tax (regressive)– 3:state income tax 3:state income tax
(progressive)(progressive) Local GovernmentsLocal Governments
– 1:Federal/State1:Federal/State– 2:property (usually 2:property (usually
progressive)progressive)
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3. Medicare is a3. Medicare is a
A) Progressive TaxA) Progressive Tax B) Regressive TaxB) Regressive Tax C) Proportional TaxC) Proportional Tax D) Sin TaxD) Sin Tax
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7. Person A earns $20,000 a year 7. Person A earns $20,000 a year & pays $4,500 in taxes. Person B & pays $4,500 in taxes. Person B
earns $100,000 a year & pays earns $100,000 a year & pays $10,000 in taxes. The tax they both $10,000 in taxes. The tax they both
paid was a: paid was a: A) Sin TaxA) Sin Tax B) Progressive TaxB) Progressive Tax C) Regressive TaxC) Regressive Tax D) Proportional TaxD) Proportional Tax
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8. Person A earns $20,000 a year 8. Person A earns $20,000 a year & pays $2,000 in taxes. Person B & pays $2,000 in taxes. Person B
earns $100,000 a year & pays earns $100,000 a year & pays $20,000 in taxes. The tax they both $20,000 in taxes. The tax they both
paid was a: paid was a: A) Sin TaxA) Sin Tax B) Progressive TaxB) Progressive Tax C) Regressive TaxC) Regressive Tax D) Proportional TaxD) Proportional Tax
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I. Economic Impact of Taxes - Continued
This could show the effect of a tax on prescription medicine.
This might be the effect of a tax on candy bars.
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Random Tax StuffRandom Tax Stuff The Obama AdministrationThe Obama Administration Fair TaxFair Tax Freedom WorksFreedom Works Some tax incentives (in coSome tax incentives (in co
mmon language)mmon language)