Stock Market Analysis and Personal Finance Mr. Bernstein Taxes May 21, 2014
Stock Market Analysis & Personal Finance Mr. Bernstein Reasons for Taxes Raise revenues to fund government programs Regulate and influence business and personal activity Fiscal policy – affect economic growth rates “Sin taxes” (ie alcohol, tobacco) Tax rate reductions to encourage desirable ventures (ie, energy policy) Influential special interests and donations to politicians
Stock Market Analysis & Personal Finance Mr. Bernstein Types of Taxes that Affect Personal Finance Sales tax Find the sales tax rate in the following states: NJ_____NY_____PA_____DE_____ Excise Tax Gas tax, phone tax, airline ticket tax, etc. Sin Tax: Alcohol, tobacco, etc.
Stock Market Analysis & Personal Finance Mr. Bernstein Types of Taxes that Affect Personal Finance Property Tax Primarily collected by local governments Estate Tax Federal tax…states may also collect inheritance tax Gift Tax
Stock Market Analysis & Personal Finance Mr. Bernstein Income Tax Primary source of revenue for Federal government Tax on wages, salaries, self-employed earnings, dividends, interest, capital gains, royalties and other sources of income The IRS was established in 1862 and is responsible for collecting federal income tax More tax revenues please
Stock Market Analysis & Personal Finance Mr. Bernstein Tax Freedom Day The price of running our government and the entitlements it awards For New Jersey resident, Tax Freedom Day in 2013 was May 4…day 124 How types of taxes are used in calculating Tax Freedom Day?
Stock Market Analysis & Personal Finance Mr. Bernstein Fairness and Taxation – what is a “Fair Share”? Flat Tax - one rate, regardless of income level No tax breaks for charity, home mortgage, etc. Progressive Tax – rates are higher for higher earners Regressive Tax – rates are higher for lower earners Where do you think tax rates will go in the future? Where do you think tax rates should go in the future?