Accounting

02.03 Tax Debate Worksheet

Career Name: _______________ Yearly Income: _______________

Flat Tax

Some Americans are supporting switching to a flat income tax rate of 15%. How much would you pay under this plan?

(Your Income) X 15% (or .15) = _______________

Calculator Tip: To multiply by a percentage, you can use your calculator in two ways. You can use the percent symbol key or you can enter the percentage as a decimal. To change a percentage to a decimal, move the decimal point two digit places to the left. Example: 20% becomes 0.20

Regressive Tax Plan

Mark “X” next to the row that matches your yearly income.	Proposed Regressive Plan	Calculate your tax. For example, $10,000x40%=$4,000 in tax.
	40% on income up to $25,000
	30% on income between $25,000 and $34,000
	25% on income between $34,000 and $44,000
	20% on income between $44,000 and $80,000
	10% on taxable income over $80,000
TOTAL

Progressive Tax Plan

Mark “X” next to the row that matches your yearly income.	Proposed Progressive Plan	Calculate your tax. For example, $10,000x10%=$1,000 in tax.
	10% on income up to $25,000
	20% on income between $25,000 and $34,000
	25% on income between $34,000 and $44,000
	30% on income between $44,000 and $80,000
	40% on taxable income over $80,000
TOTAL

Reflection

Reflection Questions	Your Responses
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.

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