Transcript taxes _ governmentx

 What
are the 3
types of
activities that
government
performs?
 What
are some examples?
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National Defense
Police & Fire
Health Services
Street & Park Maintenance
Sanitation
Highway & Bridge Construction
Public Education
Public Transportation
Water, Gas, & Electrical Systems
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Government prevents certain companies from
raising their prices and draining our
economy.
Regulations need to be set for what type of
companies?
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Credit Card Companies
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USPS (Postage Price)
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Safety Codes
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Product Disclosures
Utility Service
(Cost of Electric, Gas, & Sewer)
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8.3% of America
is unemployed
What are some
other examples
of how
government
helps re-circulate
money back into
the economy?
I am not included in this
%.
Welfare
 Social Security
 Unemployment
Benefits
 Financial Aid
 Debts to other
countries
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Assisted Living
Retirements
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Who pays for public
services & national
defense?
Who pays
outstanding debts
to other countries?
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In 1789, Acts of Congress
designated what department to
manage government’s revenue
& spending?
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Who are they and
what do they do?
What department of
government do they
fall under?
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Definition: The federal agency responsible for
administering and enforcing the U.S. Treasury
Department's revenue laws
Collects individual income taxes
Collects employment taxes
Determines pension plans
Handles corporate, excise, gift, & estate taxes
 Benefit
Principle vs.
Ability-to-Pay
Principle
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People who benefit from a public service
should PAY FOR IT! Examples include:
Toll Roads (PA Turnpike)
Parks & Recreation
College Tuition
Health Services
with higher
incomes and more
possessions will pay
more in taxes.
 People
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How does it work?
What is an example
of proportional tax?
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Definition – a tax that remains the same
even if the purchase price increases.
Our state sales tax is 6% on purchases
If we buy something for $14.00 or $1,000,
the sales tax does not change
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Definition: a tax rate that increases as the
amount being taxed increases.
An example will be income tax we pay to the
government
You may work “overtime” hours for some
extra cash, but you will also pay more in
progressive tax
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Definition: a tax
whose rate
decreases as the
amount being taxed
increases.
Linked to
proportional tax
and effects lowerlevel income
families
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A system that applies
the same tax rate to
every taxpayer
regardless of income
bracket.
A flat tax applies the
same tax rate to all
taxpayers, with no
deductions or
exemptions allowed.
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http://www.youtub
e.com/watch?v=qsc
ED3psy_U
 Definition
– taxes added to the
price of goods and services at the
time of purchase.
 Mostly
your everyday purchases
add sales tax but why is there no
tax on gasoline?
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Definition: tax collected
on the sale of specific
goods and services.
Tobacco
Gasoline
Alcohol
Cigarettes
Firearms
Air Travel
Taxes are built into price
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Definition: Taxes
paid on the value of
real property.
Typically paid to
local governments
& school districts
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Gift taxes are taxes
that the giver of
gifts may pay.
The maximum
value of untaxed
gifts in 2014 is
$14,000.
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Each parent can gift
that amount
($14,000
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If you give jewelry, property, stocks or
anything else of monetary value to anyone
besides your spouse (has to be a US citizen)
and NOT received full market value and have
NO expectation of getting it back then…
That gift may be subject to federal gift tax
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The person giving the gift is responsible for
the gift tax – Unless they received full value
for the gift (then it becomes possibly capital
gains tax, state sales tax etc…)
What about the receiver of the gift?
◦ Could possibly have to pay capital gains tax when
and if the item is sold for more than you got it for.
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Yes, well kinda – As you know there are a
million different taxes.
Federal Income tax though currently about
47% of all Americans do not pay income tax.
Why? Many reasons…
◦ They make too little (ability to pay principal)
◦ They have an enormous amount of write offs to
make their AGI to low to tax.
 Health expenses / kids / investment losses /
Charitable donations
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How you say?
◦ They may be living off investments only
 If they can show investment losses for that year they
can write down their AGI.
 Remember just because they have $300,000,000.00 in
investments does not make it income. They would
have to sell for it to be income or receive dividends to
be considered income.
 Some have investments in foreign companies and pay
those rates to those governments.
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Taxed on the sale of assets
◦ According to the IRS “almost everything you own or
use for personal or investment purposes is a capital
asset”.
◦ When an item is sold the difference between the
basis (cost) of the item and the sale is what is
taxable.
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There is short term capital gain and long term
capitol gain.
Short term = hold it for less than one year
◦ Could be taxed at income tax rate
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Long term = hold it for more than one year
◦ Could be taxed at 0 – 28% depending on what it is.
 (art, coins, small business stock)