Chapter 2 Income Benefits and Taxes What Is

Chapter 2 Income, Benefits, and Taxes

What Is Unearned Income? Earned Income Unearned Income Variable Income Salaries and wages Interest Business profits Tips Dividends Rents Commissions Capital gains Royalties Bonuses Gambling winnings Farm Income Professional fees Alimony Social security benefits Pensions Annuities Unemployment compensation 2 -2 Unearned Income and Benefits Slide 2

What Type of Taxes Do You Pay? • Taxes are based on consumption, income, and wealth. • Direct taxes are paid directly to the government. o Examples: income and property taxes • Indirect taxes are charged on goods or services bought by the consumer. o Examples: use, excise, and sales taxes 2 -2 Unearned Income and Benefits Slide 3

How Do You Benefit from Paying Taxes? • Direct benefits o Examples: social security, police, national parks • Indirect benefits o Examples: public education for citizens, free vaccines 2 -2 Unearned Income and Benefits Slide 4

Building Communications Skills Critical Listening • Evaluate the information you hear. • Consider only important or relevant information. • Make good decisions based on what is accurate and useful. 2 -2 Unearned Income and Benefits Slide 5

Focus On. . . Social Security Benefits • Workers pay into the social security fund through payroll deductions. • A social security number is assigned to each person. • Employers match the payments. • Upon retirement, workers receive a monthly benefit check. 2 -2 Unearned Income and Benefits Slide 6