What is our tax money used for? · Unit 2 Lesson 2 Income, Sales & Property Tax.notebook 4 March...
Transcript of What is our tax money used for? · Unit 2 Lesson 2 Income, Sales & Property Tax.notebook 4 March...
Unit 2 Lesson 2 Income, Sales & Property Tax.notebook
1
March 11, 2015
What is our tax money used for? Unit 2 Lesson 2
3 Main Types of Taxes
3 Main Types of Taxes
1. Income Tax
2. Property Tax
3. Sales Tax
*Turn to page 47 in your book.
I have to pay
sales tax?!
Income Tax- pg 47• tax on your salary (income)
• Federal income tax & state income tax• More money you make, the greater tax you
will pay- progressive•\
largest source of
tax revenue for the
federal govt?
Income tax.
Federal Income Tax vs. State Income Tax
http://abcnews.go.com/Business/statesincometaxus/story?id=21490926
Federal Income Tax• everyone pays federal income tax
• Federal Income Tax is the largest single amount
withheld from your paycheck
State Income Tax• Depends on which state you live in
• There are 7 states in the U.S.
that do not have state income tax-
Extra Credit- Which 7 states do not have a state
income tax?
http://www.irs.com/articles/stateincometaxvsfederalincometax
Unit 2 Lesson 2 Income, Sales & Property Tax.notebook
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Income Tax money is used to support the
country
• Medicare, Social Security
• Army
• Government Administration
Property Taxes- pg 48• based on the value of property
• homes, cars, commercial buildings
• average property tax in NJ (for your home) is
approximately $7, 885• Property tax in Millburn is $20,439
• paid 4x per year
http://www.cnbc.com/id/40658494
Property Tax money is used to
support your local government
• Public schools
• local roads and street lights
• police and jails
• fire fighters
• garbage collection
Page 60
Income Tax Tax on earnings, progressive
Progressive: the more you make, the more you pay
Property Tax used for local government
Exit
Income Tax & Property Tax are similar in that... but differ in that...
Unit 2 Lesson 2 Income, Sales & Property Tax.notebook
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March 11, 2015
Do Now
What type of tax is progressive? What does that mean?
Extra credit article: states with no state income tax
Wyoming, Washington, Texas, South Dakota, Nevada, Florida, and Alaska
Sales Tax- pg 48• added to purchases
• each state decides its own sales tax
• NJ- 7%
• In NJ there is no sales tax on clothes,
but in NYC there is!• average sales tax in U.S. 5.75%
• Regressive
• Tax exempt- non taxable
http://www.nyc.gov/html/dof/html/business/nys_sales_tax.shtml
5 States with NO Sales Tax
In NJ- Places with reduced retail
sales Tax
• 3.5% instead 7% - 37
communities in NJ
• To help stimulate economy in
lower income areas
> Long branch, Newark,
Irvington, Elizabeth, Camden
http://www.dailyfinance.com/2013/05/05/the5stateswithnosalestax/ Calculating Sales Tax
1. Turn % into a decimal
• move decimal 2 places to the left
2. Multiply decimal by original amount
• round to 2 decimal places
3. Add amount back to original amount
of item
Practice:
Couch $450 7% sales
.07 x 450 = $31.50
450 + 31.50 = $481.50
Unit 2 Lesson 2 Income, Sales & Property Tax.notebook
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Practice:
Clothes $128.58 Sales Tax 4.5%
.045 x 128.58 = $5.79
$5.79 + 128.58 = $134.37
Page 60 key words
Sales Tax
regressive everyone pays the same
tax exempt items nontaxable, groceries, med. , insurance, clothing
Do Now
What type of tax is regressive? What
does that mean?
1. Define the word Tax.
2. What type of tax is progressive and what does that mean?
3. What type of tax is regressive and what does that mean?
4. What does it mean when an item is taxexempt? List 4 items that are tax exempt.
5. Define Income tax (income tax is tax on....)
6. Which of the 3 types of taxes we discussed are taken out of your paycheck?
7. Income tax is used to support (country, local govt, or state govt) pick one.
8. List 5 specific programs Income tax money is used to support
9. Property tax money is used to support (country, local govt or state govt) pick one
10. List 5 specific programs Property tax money is used to support
11. Sales tax money is used to support (country, local govt. or state govt) pick one
12. List 6 specific programs property tax and sales tax money are used for?
13. What 5 states do not have any sales tax?
14. Why are there communities in NJ where the sales tax is lower? What percent is the sales tax in those areas?
15. Tax money is used to support "free" govt services. Why do we put the word "free" in quotes?
Complete Calculating Sales Tax Worksheet
Mind- Mapping
a way to organize your thoughts on
paper
Unit 2 Lesson 2 Income, Sales & Property Tax.notebook
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Class Activity
page 49, 50 and 51 Tax Flow Chart
Page 50 - Income Tax
What is it? ________________________________
_________________________________________
Who pays it?_______________________________
__________________________________________
How is it determined? _______________________
__________________________________________
What is the money used for? (pg. 47)
__________________________________________
___________________________________________
___________________________________________
___________________________________________
_______________________________________
Page 51 - Property Tax
What is it? ________________________________
_________________________________________
Who pays it?_______________________________
__________________________________________
How is it determined? _______________________
__________________________________________
What is the money used for? (pg. 48)
__________________________________________
__________________________________________
__________________________________________
__________________________________________
__________________________________________
Unit 2 Lesson 2 Income, Sales & Property Tax.notebook
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Page 49 - Sales Tax
What is it? ________________________________
_________________________________________
Who pays it?_______________________________
__________________________________________
Taxable Items? _______________________
__________________________________________
Nontaxable items:
___________________________________________
What is the money used for? (pg. 48)
__________________________________________
___________________________________________
___________________________________________
___________________________________________
_______________________________________
Complete the venn diagram.
Income
Sales Property
LabelHome
Earnings
Purchases
deducted from
paycheck
paid 4x per year
Progressive
Regressive
7% in NJ
paid to the govt
used for the countryused for the town
used for the state
local parks
unemployment
national guard
required payment
Answer Key
Income
Sales Property
Label
Home
Earnings
Purchases
deducted from
paycheck
paid 4x per year
Progressive
Regressive
7% in NJ paid to the govt
used for the country
used for the town
used for the state
local parks
unemployment
national guard
required payment
Choose 1 type of tax.
What is it? Who pays it? How is it
paid? How is it determined? Where
does the money go (in general and
specifically)