Economics Principles and Practices, Texas Edition
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Chapter 9: Sources of Government Revenue
"Understanding Individual Income Taxes"

Introduction
As you have already learned, the individual income tax is a tax on people's earnings. The tax laws should be written so that both the taxpayer and the tax collector can understand them. This task is not always easy, but people seem more willing to accept the necessity for taxes when they understand them. The purpose of this activity is to examine the taxes that are taken from your income.

Destination Title: Internal Revenue Service Tax Interactive - It's Payday

Note: Clicking on the link above will launch a new browser window.
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Directions
Start at the Internal Revenue Service Tax Interactive - It's Payday Web site.

  • Scroll down to the bottom of the page and select information for the job that most resembles your part-time job.
  • Print a copy of the page or read the information on screen and answer the following questions.
1. Which employee did you choose? Click on "Paycheck." What types and amounts of taxes were deducted?


2. What is the purpose of the Form W-4?


3. Select the "Tax Terms" page from the toolbar on the bottom of the Web page. Choose one of the tax terms and explain it in your own words.


4. According to the "Your Town" link on the home page, what are some of the goods and services paid for by your tax dollars?



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