In this lesson, we will explore why we pay taxes and how our money is used. The federal, state, and local governments enact tax laws that provide for a variety of government services, but what are the differences?
Read the first article and the second article just through the second section titled “Understanding Local Tax”. Then, answer the questions.
How Are My State Taxes Spent?
Local Tax Definition
Required
15
Required
15
If Paychecks Could Talk
Now that you’ve learned about how tax money is used at the federal, state, and local level, let’s take a deeper dive specifically into our federal tax dollars. Watch this video to learn where federal tax revenue comes from and what exactly the federal government is spending that money on.
NOTE: EdPuzzle videos shuffle answer choices and do not always match the order provided in the lesson here.
Required
3
Required
4
Required
3
Payroll Tax [vs. Income Tax]
In the previous resource, you learned that you pay Payroll, or FICA taxes, and Income taxes. Let’s take a deeper look at the differences between these two important taxes! Skim through this article and then answer the questions.
Flat Tax vs. Progressive Tax
Required
20
Required
20
Required
20
9 Types of Taxes in the US
Let’s take a look at some different ways we pay our taxes. Review this infographic and answer the questions.
Required
10
Required
10
Day 2 1/11/23
Three Types of Tax Systems
You now know more about where tax money comes from and how it’s being spent. But how does it all work? There are 3 main types of tax systems. Watch this video to learn about the differences between regressive, proportional, and progressive taxes. Then, answer the questions.
Required
10
Required
10
How Tax Brackets Actually Work
Because the U.S. uses a specific type of tax system that you learned about in the previous resource, people are taxed on a rate schedule that breaks down their income into tax brackets. Watch this video and follow your teacher's directions to answer the questions either in your student activity packet or within the EdPuzzle itself.
Required
3
Required
3
Required
3
Exit Ticket
Required
3
Required
3
Required
3
Question 1
1.
Name 3 ways state governments use tax dollars.
1._______
2._______
3._______
Question 2
2.
Name 3 ways local governments use tax dollars.
1._______
2._______
3._______
Question 3
3.
Question 4
4.
Question 5
5.
Question 6
6.
Who pays this tax?
Payroll (FICA) Taxes
_______
Income Tax
_______
Question 7
7.
Are these taxes considered a flat tax or a progressive tax? If it’s flat, what percentage?
Payroll (FICA) Taxes
_______
Income Tax
_______
Question 8
8.
What are these taxes used for?
Payroll (FICA) Taxes
_______
Income Tax
_______
Question 9
9.
Which of the 9 types of taxes is the largest source of revenue for the government?
Question 10
10.
Which of the following categories do you currently pay taxes for?
Question 11
11.
What kind of tax system does the United States use?
Question 12
12.
Explain the main differences between regressive and progressive tax systems.
Question 13
13.
Question 14
14.
Question 15
15.
Question 16
16.
Question 17
17.
Question 18
18.
What does FICA consist of?
Employer sponsored retirement
Federal & State taxes
Health insurance
Social security & Medicare
What is an example of discretionary spending? (select two correct answers)
Military
Medicare
Social Security
Education
The following options are benefits we receive as a result of government spending EXCEPT…
Air quality maintenance
Credit card debt forgiveness
National Parks maintenance
Public school education
A tax deduction…
INCREASES a person's tax liability by INCREASING his/her taxable income
INCREASES a person's tax liability by LOWERING his/her taxable income
LOWERS a person's tax liability by LOWERING his/her taxable income.
HAS NO impact on the amount of taxes a person pays.
Which statement BEST describes marginal tax rates?
Your income is always taxed at the lowest rate of that tax year (e.g. all of your income is placed and taxed in the first pocket).
Your income may fall into more than one tax bracket, so more than one tax rate can apply (e.g. fill up the first pocket and then move to the next pocket).
Your income is taxed at the highest rate that applies to your income amount (e.g. all of your income is taxed in the highest pocket).
Your income is equally split among the tax brackets (e.g. divide your income by # of brackets and apply the rates of each tax bracket).
Which of the following statements describes the CORE misconception addressed in this video?
The tax rate of the highest tax bracket your income falls into is applied to your whole income.
The standard deduction reduces your tax liability.
Portions of your income are taxed at different rates, called marginal tax rates.
When the government wants to increase tax rates, it is usually referring to the rates for the highest tax brackets.
All of these are top 3 areas that the federal government spends tax money on EXCEPT:
Medicaid
Social Security
Education
Military
The United States has a "progressive" tax system. This means that...
The higher your income is, the lower your tax rate becomes
You pay the tax rate of the highest bracket you fall into
All individuals pay the same tax rate
The higher your income is, the higher your tax rate becomes
If someone asks you what your “tax bracket” is, they are asking about your marginal tax rate which is…
The total amount of money you paid in taxes last year
The average tax rate you pay on your entire income
The refund amount on your last tax return
The tax rate you pay on your last dollar of income