Chapter 9: Sources of Government Revenue
"Understanding Individual Income Taxes"
Students have learned that 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.
Students will role-play sample part-time jobs and the amount
of individual income taxes paid.
Students will use information from the Internal Revenue Service
Tax Interactive Web site to find out more about individual
Students should be familiar with the following terms:
tax return: annual report filed with local, state,
or federal government detailing the income earned and taxes
individual income tax: tax levied on the wages, salaries,
and other income of individuals
Content Standards (from the National Council on Economic Education)
Standard 13: Income for most people is determined by
the market value of the productive resources they sell. What
workers earn depends, primarily, on the market value of what
they produce and how productive they are.
Standard 16: There is an economic role for government
to play in a market economy whenever the benefits of a government
policy outweigh its costs. Governments often provide for national
defense, address environmental concerns, define and protect
property rights, and attempt to make markets more competitive.
Most government policies redistribute income.
1. Students will identify types and amounts of taxes that
are deducted from an individual's paycheck.
2. Students will define the purpose of the Form W-4.
3. Students will select and restate a tax term.
4. Students will list goods and services paid for by tax dollars.
Web Activity Answers
1-4: Teacher may prepare an answer sheet from the Web site.
Encourage students to select the "What Is Fair" section of
the Web site. Have students solve the Case of the Fair Tax.
Have students read the information provided on the Web site
regarding electronic tax filing. Download sample forms and
have students complete them.
Student Web Activity