Taxes
Look and Listen
Income
National and State
- On money you earn
Tax Bracket
Where tax brackets come from
• Congress establishes tax rates that apply to
different levels of taxable income. Current law
provides rates from 10% to 35%.
• The higher your income, the higher your tax
rate.
• The range of income where you stay at any
particular rate is known as a tax bracket. For a
single person in 2008 the rate on taxable income
between $32,550 and $78,850 is 25%, so those
numbers establish the 25% bracket.
Single
Taxable Of the
But not
income is The tax is Plus amount
over
over over
$0 8,025 $0.00 10% $0
8,025 32,550 802.50 15% 8,025
32,550 78,850 4,481.25 25% 32,550
78,850 164,550 16,056.25 28% 78,850
164,550 357,700 40,052.25 33% 164,550
357,700 103,791.75 35% 357,700
$32, 550
x .25 (25%)
$8,137.50
Sales Tax
• State or city
- On money you spend
Corporate Tax
• Tax on company profits (money they
make)
Property Tax
• State or city
– On the value of the home you live in
Investment Tax
• Federal and State
– On the stocks, bonds, and other
investments you sell
The wealthy should pay a larger
proportion (amount) of income
taxes than the poor.