Chapter 1 Slides.pdf - Introduction to Taxation By the end of today you will be able to Identify differences between different types of taxes Describe

Chapter 1 Slides.pdf - Introduction to Taxation By the end...

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Introduction to Taxation
By the end of today you will be able to… Identify differences between different types of taxes Describe the current composition of federal tax revenue List the (conflicting) priorities in a typical tax policy agenda Conceptualize challenges in tax reform Enumerate key tax planning strategies
A lesson from the past …
Major Types of Taxes Income Taxes Excise Taxes (gasoline, tobacco, liquor) Employment Taxes Estate & Gift Taxes (transfer of wealth) Property Taxes (ad valorem on real or personal property) Sales Taxes
Tax Revenue Statistics Source % Total Revenue Avg. Rev. per Return Overall Audit Probability Tax Revenue ($’s in billions # Returns (#’s in millions) Individual Income Tax 50.35% $7,009 1.1% $1,006 143.6 Corporate Income Tax 8.76% $25,528 1.5% $175 6.9 Excise and Customs Taxes 2.38% $90,973 2.4% $47.5 0.52 Estate and Gift Tax 0.37% $33,338 18.2% $7.3 2.2 Employment 38.14% $25,902 0.2% $762.7 29.4 Partnerships N/A N/A 0.4% N/A 3.6 Other (mostly Declarations of Estimated Tax) 0.0 - - - 48.2 Totals 100.0% $1,998.5 234.4 Source: Compiled from Internal Revenue Service Data Books for 2010.
Taxing Jurisdictions Federal Government State Government Local Governments (County and/or City) Foreign Governments The Baltimore example: Federal Government: 39.6% State of Maryland: 5.75% County of Baltimore: 2.83% City of Baltimore: 3.05% Highest combined bracket 51.23%

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