Federal, State and Local:
What Are Taxes?
Taxes are a financial fee imposed
by the government on taxpayers
In other words, the money that the
government collects from both
individual people and businesses
The BIG Ideas…
Whatkinds of taxes are there?
Where do our tax dollars go?
Types of Taxes
Income Tax--taxes taken out of your paycheck that
go to the federal, state or local government
Sales Taxes--taxes added to the purchase of a
good or service
Property Taxes--taxes paid to the federal, state or
local government on items/land you own.
Social Security/Medicare--taxes taken out to aid
the federal government with these programs
When you get a paycheck, it may not look like
you thought it would! You might ask
yourself…where did my money go??
THE ANSWER: TAXES!
Gross pay: The total amount of salary paid before
any deductions are taken out.
Net pay: The amount of salary received after taxes
and deductions have been taken out.
an extra charge on a good or service (% varies
depending on state law)
Minnesota Sales Tax History:
1991-July 2009: 6.5%
July 2009 - Present: 6.875%
Example: a $10.00 CD would really cost $10.69
Sales Tax Rates
MN is highest in the
region, but clothing
and food for home
consumption is not
taxed. All the other
states in the region
have a sales tax on
Dakota also taxes
food for home
Property Taxes--taxes you pay on property
that you own (real estate, boats, cars,etc…)
(Residential and Business properties are
different from boats/cars/trailers etc.---
licensing fees apply!)
Property taxes mainly go to counties, cities,
school districts, police/fire stations,
So Where Does
This Money Go?
Federal Tax Money Goes To:
Health Care (Medicare)
Welfare (financial support for those in need)
Transportation - roads,bridges,etc…
Social Security (support for retired workers)
State Tax Money Goes To:
State Criminal Code (prisons,
jails, correctional facilities)
Working conditions (safety,
Regulates property, industry,
business and public utilities
Local Tax Money Goes To:
Police and Fire Protection
Things to Think About:
•Do you think the tax structure makes
•Should the government pay for other
things with our tax dollars?
•How would your life be different if we
didn’t pay taxes? Would it be better?