Taxes are necessary to pay for public services

• Taxes are necessary to pay for public services • Article I, Section 8 grants Congress the power to tax • 16 th Amendment allows the taxing of incomes

Benefits of Taxes Federal Spending from 1962 through 2020 (estimate) O Everyone groans when taxes are withheld or they have to file their taxes in April O Tax fairness: ability to pay vs benefits received ●progressive (% increases) ●regressive (fixed amount) ●proportional (set percent) O Benefits of taxes might not be easily recognized O Federal Tax Benefits O CA Tax Benefits O Social Security O Medicare O National Defense O Welfare O Interest on Nat’l Debt O Education (K-12, colleges) O Social Services O Utilities O Health O Transportation

Paying as you Earn O Most people overpay their taxes throughout the year O This is due to overwithholding on the W-4

Tax Deadline: April 17 April 15 (Sunday), April 16 (Federal Holiday, Monday) O Every wage earner must file their taxes O This includes wages, salaries, bonuses, commissions, and tips O Employers also report your wages, etc. to the IRS (Internal Revenue Service) O Reported wages are returned to you on a W-2 O Taxes can be complex, but for most Americans it is quite easy

new bracket, effective in 2019 is behind 2017 info Federal Income Taxes O Taxes Withheld during the Year O Income Taxes (progressive tax) O Payroll Tax (Social Security Tax 6. 2% on income up to $127, 200) O Medicare Tax (1. 45%) O Standard Deduction & Personal Exemption: $10, 400* O Form W-2 (mailed in January) O Reports all taxes withheld from your paycheck last year O Filing your Taxes: Form 1040 EZ 2018 2017 Federal Tax Brackets* Brackets 10%: $0 -9, 525 $0 -9, 325 12%: 15%: $9, 526 -38, 700 $9, 326 -37, 950 22%: 25%: $38, 701 -82, 500 $37, 950 -91, 900 24%: 28%: $82, 501 -157, 000 $91, 900 -191, 650 32%: 33%: $157, 001 -200, 000 $191, 650 -416, 700 35%: $200, 001 -500, 000 $416, 700 -418, 400 37%: over $500, 000 39. 6%: $418, 400+ Individual tax brackets (not married)

IRS Form 1040 EZ

IRS (2017 Federal Income Tax Table)

California Income Taxes O Taxes Withheld throughout Year California 2017 Brackets O State Income Tax (progressive) O Standard Deduction: $4, 236 O Filing your Taxes: Form 540 O Taxes mailed to the CA Franchise Tax Board 1%: $0 - $7, 850 2%: $7, 850 - 18, 610 4%: $18, 610 - 29, 372 6%: $29, 372 - 40, 773 8%: $40, 773 - 51, 530 9. 3%: $51, 530 - 263, 222 10. 3%: 263, 222 - 315, 866 11. 3%: 315, 866 - 526, 443 12. 3%: 526, 443 -1, 000 13. 3%: 1, 000+ Individual tax brackets (not married)

What If You Don’t Pay O Consequences range from extra penalties to imprisonment. O $25, 000 maximum penalty if you do not file your taxes O Interest and late fees must be paid; Tax liens on property Average Effective Tax Rates