TAXES AND YOUThe American Taxation System

“The Art of Taxation is to Pluck the Goose Without Making it Squawk”

- Colbert 1778

Net and Gross Income

• Taxes – Required payments of money to governments that are used to provide public goods and services.

•Net – Take home pay•Gross – Base Pay

Primary Tax Base

• Consumption Taxes

• Sales – Tax on any item sold.

• Excise Tax – Taxes on the sale of specific products or transactions.

• Wealth Tax

•Property•Most important source of income for local governments.

•Reappraised every 6 years.•Updated every 3 years.

Progressive and Regressive Taxes

• Progressive – Taxes that take a larger % of income from higher-income groups than low-income groups.

• Regressive – Taxes that take a larger % of income from lower-income groups than higher income groups.