What is a progressive tax system?

How does it differ from a regressive tax

system?
In a progressive tax system, you pay a higher percentage rate as your income/wealth increases.
As your income/wealth increases, so to does the percentage you must pay.
A regressive system is the reverse, with individuals of lower income/wealth paying a higher
percentage rate than those with higher income/wealth. There is an inverse relationship between
percentage rate and income/wealth. As one decreases, the other increases.

What is gross income?

Gross income is the starting point for determining Federal and stateincome tax of
individuals, corporations, estates and trusts, whether resident or nonresident. "Except
as otherwise provided" by law, Gross income means "all income from whatever
source," and is not limited to cash received.
What is the alternative minimum tax?
The alternative minimum tax (AMT) is an income tax imposed by the United States
federal government on individuals, corporations, estates, and trusts. AMT is imposed at
a nearly flat rate on an adjusted amount of taxable income above a certain threshold
What is a tax audit?
A tax audit is an examination of your tax return by the IRS to verify that your income
and deductions are accurate. A tax audit is when the IRS decides to examine
your tax return a little more closely and verify that your income and deductions are
accurate.
What are two ways that a person's wealth may be taxed? Describe these
taxes.
Estate taxes are taxes levied on a persons estate when that person dies. To
do this, the government takes the market value of the persons property,
investments, and other parts of the estate and imposes a tax on the overall
estate value.
Critical Thinking Questions
What are some strategies that you can use to prepare to file taxes each
year? What would be the benefits of these strategies?

If you have experience dealing with taxes, tax forms are available online and
at the library or post office for you to complete yourself. You could hire
someone to do your taxes for you.
What are the benefits of taxes for societies and individuals?
At the core taxes are the mechanism by which a governemt is funded. Taxes
pay for public education, public transportation, law enforcement, and to build
public roads.
How do taxes influence responsible financial planning? Discuss some
examples of how taxes may influence a financial plan.
Effective tax planning strategies work in legally reducing your tax liabilities. An
effective taxation plan can also protect your personal and business assets while
keeping your tax liabilities to a minimum. It optimizes your working capital, and
strengthens your financial efficiency. It also supports the spreading of taxable
income among different family members.
4. What are three types of taxes that you pay (or are likely to pay in the

future)? Describe these types of taxes.

Excise taxes which are put on specific goods like gas, tires, airfare, and cigars.
Income times are taxes put on you based on your income, and there is inheritance
taxes which are taxes put of assets and property from a diseased Pearson. 5. Find a
tax return form and practice filling it out, using either your own information or that
of a hypothetical person. What are some of the challenges in filling out a tax return?
There is a lot of things on the form to check off that I dont even know what it
means.