The document discusses different types of taxes and whether they are fair. It explains that Social Security tax is proportional, taking 7.45% of income up to $90,000 but nothing after that, which some argue is fair. However, this makes the tax regressive as the poor pay a higher percentage. Income tax is progressive, taking higher percentages from higher incomes. Other examples of progressive taxes include luxury, cigarette, alcohol, and inheritance taxes. Regressive taxes disproportionately impact the poor, such as gas taxes. The document asks which taxes should be raised or lowered.

1. What is fair?

2.  How much money is deducted from your
paycheck for Social Security & Medicare tax?
 7.45%
 How much is deducted from someone who
makes $80,000?
 7.45%
 This is PROPORTIONAL.
 Is it fair?

3.  How much money is deducted from someone
who makes $200,000 for Social Security &
Medicare tax?
 7.45% of the first $90,000, 0% after that
 Is it fair?
 One argument is yes, because social security
benefits don’t go up for that person, so why
should they pay more.
 Do you think this argument is from the
Republicans or Democrats?

4.  Social Security over $90,000 is a REGRESSIVE
tax, because the poor pay at a higher
percentage than the wealthy.
 Gasoline tax is another example:
◦ One person earns $5,000 a year and buys $50 gas
per week
◦ Another person earns $50,000 a year and buys $50
of gas per week
 They pay the same AMOUNT of tax, but the
person who earns $5,000 pays a higher rate.

5.  What other regressive taxes can you name?

6.  How much income tax does someone who earns
$5,000 pay?
 $0
 $10,000?
 About $500
 $25,000?
 About $2800
 $200,000?
 About $75,000
 This is called PROGRESSIVE – higher incomes pay
higher rates.
 Is this fair?

7.  What progressive taxes can you name?

8.  Luxury tax (yachts, fur coats, jewelry)
 Cigarette tax
 Alcohol tax
 (Sin taxes)
 Excise tax (on cars)
 Sales tax on food & clothing
 Inheritance tax
 Lottery – a voluntary tax

12.  If you had to raise one tax, what would it be?
 If you could lower one tax, what would it be?