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TAXES AND YOU The American Taxation System
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.
