POS-301: Analyzing Tax Worksheet

POS-301: Analyzing Tax Worksheet

Complete all five parts of the worksheet.

Part One: Income Tax

Use one of your paystubs to fill in the table below.

Who Determines the Amount of Tax?
Services the Tax is Applied Towards
Federal Tax
Congress[MR1]
Pubic good and utilities (such as defense, education and social security
State Tax
Federal governments[MR2]
Public services
Social Security Tax
Determined by the state[MR3]
Aims at helping the employed persons once they retire from active service
Medicare Tax
Federal Government
Payment of medical services [MR4] within the country
Other (Please specify)

Part Two: Sales Tax

Use a receipt for a purchase you have made recently to answer the questions below.

List all of the taxes (percent, amount, etc.) found on the receipt.
The sales tax range from 1.8% to 7.75%
VAT
Corporate Income tax

2. Who determines the amount of each tax?
The sales taxes are determined by the state because most of these states are independent. Therefore the local government has to come up stringent but proper measures that will ensure al the necessary tax elements are captured.
3. Where does revenue from this tax go? What does it fund?

[MR5]

Part Three: Utility Tax

1. List all of the taxes (percent, amount, etc.) found on the bill.
Distribution of water
Distribution of electricity
Distribution of natural gas
Urban transportation
Motor transportation and public service businesses.
2. Who determines the amount of each tax?
The amount is determined by the federal or ststae state government depending on the available utilities.
3. Where does revenue from this tax go? What does it fund?

Use one of your utility bills to answer the questions below.

[MR6]

[MR7]

Part Four: Property Tax

Use one of your own property tax statements to answer the questions below.

1. List all of the taxes (percent, amount, etc.) found on the statement.
They are imposed by the local government or other local authorities. The tax rates range from 0.2 to 1.% deending on the monetary value of the product on sale.

Real estate tax ranging from 0.28% and 2.29%
Vehicle property tax (0% to 4.8%

2. Who determines the amount of each tax?
The tax rate is determined by the state.
3. Where does revenue from this tax go? What does it fund?
The revenue from this tax is specifically used by the state to upgrade its projects and services towards the promotion of better life among its citizens

[MR8]

Part Four: Summary and Analysis

Part Five: Summary and Analysis

Write a 200-350-word summary below of your findings and what you have learned about how you are taxed.

Taxation is a mandatory contribution to which the contributor should not expect any direct personal service as a mode of compensations. Hyman (2013) observes that taxation is a means by which the government finances its activities. There are those goods and services that cannot be provided by the private market. He further points out that these products include public goods such as healthcare education and roads. Private organizations would want to make a profit on each investment they make while individuals may not be in a position to pay for such services.
Taxations aids in covering the free rider problem since there are those goods that cannot be given any monetary value. For instance, road user such pedestrians cannot be charged the same as motorists. Additionally, there are goods such as military services that cannot be assigned monetary value and allocated to individual households. Consequently, the power to tax instituted by the Constitution seeks to allocate resources equally and cannot be assumed as though they intend to destroy. Mostly, governments should ensure that they formulate their taxation policies such that they obey the canons and principles of taxation. For example, the tax system should be economical, and the system should be certain of the amount it shall collect from each tax (Boustan, Ferreira, Winkler & Zolt, 2013).
Resultantly, I would state that a tax is not as evil as John Marshal puts it. It helps equalize the disparities between the wealthy and the have-nots. The poor are also able to enjoy the same goods and service that would have only been at the disposal of the rich. Lastly, the collected taxes supplement other sources of the government’s income such as fines and external as well as internal debts.

[MR9]

References

Boustan, L., Ferreira, F., Winkler, H., & Zolt, E. M. (2013). The effect of rising income

inequality on taxation and public expenditures: Evidence from US municipalities and

school districts, 1970–2000. Review of Economics and Statistics, 95(4), 1291-1302.

Hyman, D. (2013). Public finance: A contemporary application of theory to policy. Cengage

Learning.

[MR1]The Federal taxes are determined by the IRS and are based off of your income, your filing status and the information you put on your w-4 form

[MR2]The federal (national) government does not determine state taxes

[MR3]Where did you find this information?

[MR4]What kind of medical services specifically?

[MR5]You did a nice job on the first two questions, but you did not respond to #3