The department of treasury references


Assignment:

Respond to the student, needs to be 200 words each. ECON CLASS

1.The Department of Treasury references three specific taxes that affect both consumers and producers and fund the public sector.
The first is income tax, which is a tax based on the amount of income that an individual makes, as well as businesses, that are used to fund Federal programs such as unemployment and social security. Second is what is known as a consumption tax. This tax, used by State and Federal government, is for public items such as roads and mass transit systems and, in this example, are taken from gasoline taxes. Third is a property tax, that is paid monthly with a mortgage that assists in funding State public school systems and may include levies when the original property tax is not enough.

The effect of higher taxes, specifically income tax, can cause the consumer hesitation to become a homeowner thereby lowering the amount of taxes that the Federal government (the producer) bring in to fund needed public programs. There are things that bring the consumer back into the fold of homeownership by creating incentives, such as deductions in yearly taxes for owning a home and paying interest on a mortgage just to name a few. Consumers also have the "need" (want) to know where their hard earned money is going and it is important for individuals know that "most of the Federal Government's revenue comes from personal income taxes. Other sources of revenue include social security and other insurance taxes and contributions, corporate income taxes, excise taxes" ("Economics of Taxation", 2016).

2. In the U.S., taxes make up the largest source of revenue for the Federal Government. The tax code is extremely complicated and navigating through it can be a challenge for individual taxpayers and businesses alike. Taxes are collected at both the Federal and State levels. At the Federal level you have four major key taxes that are collected. They are Individual Income tax, Social Security tax, Corporate Income tax, and Excise taxes. The United States has a progressive tax system in that the percentage of tax owed by the individual increases as they move up in the tax bracket. The more an individual earns, the more of a percentage that the government taxes. Social Security tax is collected in a manner that is regressive in that the closer the individual gets to reaching the required amount of taxed income, the less their percentage of taxed income becomes. Corporate Income tax differs from individual income tax in that it is often factored on the amount of revenue earned by the business minus the costs. Excise taxes (which are also assessed at the State level) is a tax placed on a specific good before it reaches the consumer. The State collects four major taxes to account for its revenue aside from those monies brought in through revenue from the Federal government and user charges. These taxes include Sales tax, Property tax, Personal Income tax, and Corporate Income tax. For an example of how taxes have an impact on both producers and consumers we can look to Sales tax. Sales tax can vary not only by state but by county and city. This is a percentage taxed on goods and services purchased from businesses by individuals. Depending on the amount being taxed, consumers can make decisions within the tax law on how to make their purchases. For instance, instead of making a purchase for an item a consumer sees on the department store shelf, they may turn to an online vendor like Amazon (something that I've done on many occasions) where their local tax may not be a factor. They might even drive to a point of sale in another area where the sales tax is reduced (i.e. buy in the suburbs as opposed to in the big city). Behaviors like these from consumers can help or hurt businesses (the producers) depending on their location and whether they are gaining or losing customers due to the amount of Sales tax they are forced to collect. Taxes are important to the Federal and State governments as they help fund for important government goods such as national defense, local law enforcement, social security, public education, etc. They are also necessary for paying off the national debt as often the government spends more than it collects causing it to borrow in order to achieve its objectives. It is because of the differing opinions of taxpayers on how the government should spend as well as the fluctuating deficit that the subject of taxes is the most politically charged one.

3. The main taxes that the federal government collects are income taxes, corporate income taxes, Social Security taxes, and excise taxes. "All U.S. citizens, resident aliens, and most others who earn income in the United States are required to pay federal income taxes on all taxable income, including income earned abroad (Miller 2015 134)." The federal personal income tax is the most important federal tax and it makes up about 46% of all federal taxes collected. Corporations must pay a federal tax on their taxable income, and excise taxes include taxes on the purchases of gasoline and alcoholic beverages.

The main taxes that the states collect are sales taxes, property taxes, and personal/corporate income taxes. This biggest category of taxes collect by local and state governments is revenue from the federal government. "State government revenues are spread more evenly across sources, with less emphasis on taxes based on individual income (Miller 2015 134)."

Taxes can be viewed as a bad thing or a bad thing to the average consumer/citizen/business. Taxes help to pay for our parks, schools, libraries, and roads (the list goes on and on). These are all things that we use and that we value and take for granted. I work for my mother's small business doing most of the accounting processes, so I see the amount of taxes that we pay out every week and quarter. It's very hard for a small, local business to keep the doors open most months. The payroll taxes that we pay are astounding and would boggle your mind. As consumers, we might not like to pay taxes, but it's a definite necessity and a civic duty.

Respond to student 200 words Principle of Marketing class

1. Social class is of huge importance for businesses to understand. Knowing what prices to market their products will determine how well a business will succeed. If the business markets their prices too high for the social class consumers to purchase then the business will sink quickly. It was interesting to read that only 1% of the Capitalist class is used to shape the national economy. I would have thought that number would be higher. With the way the tax brackets are I can see why the middle class is the majority of the economic make up. Kind of sad for those who work so hard at minimum wage to never really have enough income to relax with. It's also sad to me to know that 8-9% of the United States is in the underclass category. I know that some people could potentially get out of that category but I often wonder about the other individuals that have issues that keep them from working. I don't think that disability income is enough for people to pay even a portion of their bills. Just my thoughts.

2. You have included some great information in your post. Social class deals with the upper class, middle class, and lower classes of our economy. All have different levels of jobs, education, and income. Each class views products and services differently. Marketers are interested in social classes because they want to know how and where to market to each class. For example, Porsche would not be likely to advertise with billboards in the small farming community in which I live. The area is mostly working class and middle class. Ford or Chevrolet would be more likely to market in this area where they are not wasting their resources. I believe this will also have something to do with demographics.

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