Accounting

Assessment Introduction

Do you have that calculator? Now that you know the basics about taxes, you will compare the effects of different tax systems on a specific career path. Imagine you are a working American who has completed your education. Some members of Congress have proposed changes to the U.S. federal income tax system. They are debating which type would be most fair and best for the country.

Three plans have been suggested—a 15% flat income tax, a simplified progressive plan, and a simple regressive plan. The simplified progressive plan would remove marginal tax rates and deductions. It would be one set rate based on total income. Everyone wants your opinion, so you decide to see how each plan would affect you before you select one to support. Spin the wheel to begin.

Now that you have your career and income, follow these steps to complete your assignment.

1. Calculate how much you would pay in federal income tax under each plan. Use this Tax Debate Worksheet to record your findings and reflections.
2. Answer each of the following reflection questions in complete sentences. You may answer them on the worksheet.
   • Is federal income tax a direct or indirect tax? Explain your response.
   • What are the main differences between the flat, regressive, and progressive tax plans?
   • Under which plan would you pay the most in taxes? Under which plan would you pay the least in taxes?
   • Which tax system would benefit you the most? Explain your response and refer to your specific career.
   • Do you think the plan that benefits you most is the most fair for everyone? Explain your response.
   • Imagine you marry and your spouse earns $50,000 per year. You will be filing your taxes together. Does this change your opinion of the proposed tax plans? Explain your response.