Taxes

Taxes

AKS 25 a & b

AKS

AKS 25a
Describe income,
sales, property,
capital gains, and
estate taxes in the
U.S.

AKS 25b
Describe the
differences
between
prgresseive,
regressive, and
proportional taxes

2

“

In this world nothing can be

said to be certain, except

death and taxes.

- Benjamin Franklin

3

Progressive,

Regressive, and

Proportional

1

5

Income, Sales,

Property, Capital Gains,

and Estate Taxes

2

6

COMPARE and CONTRAST

PROGRESSIVE

Tax amount

increases as the
taxable amount

increases

Examples:

Income Tax

Estate Tax

REGRESSIVE

Proportion of
amount taxed
increases as

taxable amount

decreases

Examples:

Sales Tax

Social Security

Tax

PROPORTIONAL

Type of

regressive

Same percentage

to everyone
regardless of

income

Examples:

Sales Tax

Social Security

7

Open Ended

What does this bucket example indicate about the progressive tax system in the U.S.?

Types of Income

There are two types of income
1. Passive

a. What you receive from assets

that generate income

2. Earned

a. Income you get from working

Both of these face taxes!

8

Open Ended

Provide two of your own examples for both earned and passive income.

Clarification

There are 4 different taxes you will see on a paycheck, but federal

income and state income taxes are proportional.

Federal income tax—The federal government
levies a tax on personal income.

-provides for national programs such as
national defense; veterans and foreign
affairs; social programs; physical, human,
and community development; law
enforcement; and interest on the national
debt.

9

Draw

Draw an example of something Federal Taxes Pay for.

State Income Tax

◎ Income tax that goes to the

state and not the federal
government

Georgia Income Tax Calculator -
SmartAsset

10

Estate Taxes

◎ Even after someone passes

away, the government will tax
their estate.

◎ An estate tax is levied on the estate of the deceased
while an inheritance tax is levied on the heirs of the
deceased

◎

Currently, most estates won't trigger the federal estate tax, as it
only applies to estates worth more than $11.7 million for 2021

11

12

17 States With Estate or Inheritance Taxes

Regressive and Proportional

Regressive and Proportional
taxes can be brought
together in the same group.

These taxes do not change
the percent amount, but
they take more from lower
income individuals

13

Sales Taxes

◎ Anytime you go to the store

and buy something

◎ No matter which state you are

in, you have to pay it

◎ The lower income you have, the

greater the impact it will have
on you

14

“

Why would lower income be hurt

more than higher income?

If you buy something for $2.00 the
new total is $2.12. Therefore that
increase will hurt you more if you

make less money

15

How to calculate Sales tax

Take the total times the percent of the sales tax

If your total at Kroger is $50, Sales Tax is 7%

50(0.07)= $3.50

50 + 3.50= $53.50

Or

50(1.07)= $53.50

16

Match

Match the following scenarios to the correct total paid. Additionally, write the answers on your sheet.

• You spend $45 at Target. The sales tax is 8%. What is your total?

• Your total at Walmart is 50.89. If your amount before tax was $48, what is the sales tax?

• You spend $25 Kroger the sales tax is 7%. What is your total?

• Your total at Walmart is 42.36. If your amount before tax was $40, what is the sales tax?

$48.60

6.02%

$26.75

5.9%

• $48.60

• 6.02%

• $26.75

• 5.9%

Sales Tax Rates - General | Georgia
Department of Revenue

Depending on which county you visit in
Georgia, your sales tax rate will differ

Sales Tax in Georgia Counties

17

A tax that is a type of
sales tax you have to

add on really expensive

items
Luxury Tax

18

Open Ended

Research 5 items may require a luxury tax. Write them here and on your sheet.

Property Tax

A tax paid on property
by an individual or
legal entity

Property taxes usually
fund education

19

How do property taxes work?

Also known as an

Ad Valorem Tax

Tax according to
the value of your
property

Everything within
the boundaries of
a certain area
work to form the
mill rate

Calculate the final
amount

Take the mill rate
times the
assessed value of
the property

20

Capital

Gains Taxes

21

Capital Gains Tax

The government takes a tax on the
capital gains you make

Capital gains are based on your
income per year

23

Capital Gain versus a Capital Loss

Capital Gain

When you buy a
stock and sell it for
more than you
bought it for. The
difference is the
capital gain.

Capital Loss

When you buy a
stock and sell it for
less than you bought
it for. The difference
is the capital loss.

22

Federal Capital Gains Rates

24

Open Ended

So right now, your individual income is probably below $40,000. Therefore, you would not have to pay the federal capital gains tax. Why should you take advantage of less taxes? What will this mean as you invest?

State Capital Gains

25

Open Ended

Write three new things you learned today.