Grab a card and don’t show
Are you going to cooperate with
Each card represents a part of your income.
Face cards represent cash, payments under the
table, “tax free”
2-5 represent tips i.e. a waiter, hair stylist,
parking garage attendant, etc.
If you pulled a 6-10 you must return it
immediately. (they represent your paycheck and
you must deposit it to the bank.)
Let’s count the cards
How many are we missing?
Now, lets see how the government will
use the taxes.
Tax Revenue for Heritage
Perfect World Reality
Library- 5 Library-
Textbook -5 Textbook -
Teachers- 17 Teachers-
Admin. Classif.-8 Admin. Classif-
Cafeteria- 5 Cafeteria-
Deductibles (write offs)- Items withdrawn
from taxes i.e. charity, business expenses,
Is Social Security a tax?
What is a tax shelter?
*What are some of the tax proposals for this
What are taxes?
A required payment to a local, state, or
national government. Taxes give the
government money to operate
There are three tax structures
Proportional- “flat tax”
Progressive- Income tax
Regressive- Sales tax
Stats to consider:
2004, the fed. Gov’t took in $1.88 trillion in
taxes, which is $6,300 per person.
The federal government uses 6 sources of tax
Estate and gift tax
Hold on… I’m coming….
Withholding- taxes taken from income check…i.e.
Federal Insurance Contributions Act (FICA), Medicare,
Tax return – form used to file income taxes
Taxable income – income on which tax must be paid;
total income minus exemptions and deductions.
Personal exemption- set amt. that you subtract from
your gross income for yourself, your spouse, and any
Deductions – variable amt. you can deduct from gross
More info. On page 366
You’re So Bossy
This is one of your employees,
please determine their net-pay
Hours Earnings Description Amount
20 200.00 FICA 15.20
Total Taxes 31.55
Taxable Wages Calculate net pay=
Work in pairs, study some stubs
Grab two out of the six pay stubs and answer
the following for each stub
1. Name of establishment
2. Gross earnings for single pay period
3. Net earnings for single pay period
4. Amt. of FICA or Social Security
5. What is the difference between year to date
and current amount of one pay period?
And the other……
In pairs brainstorm 2 examples for
Excise Tax Gasoline, cigarettes,
Real estate, jewelry,
Under $11,000 a year
See Figure 14.5 pg: 367 and
answer the questions
I am married and make $119,950 what is
the amount I am taxed over?
I am single and a student at Cal Poly and
make 2,000. How much do I pay in
Insurance policy for old-age, survivors,
and Disability insurance
Why was SSI created? When?
Why is it failing?