FOR MY STUDENTS CRASH COURSE TAXES - HANDOUT

Watch the video here: https://www.youtube.com/watch?v=7Qtr_vA3Prw

and fill in the gaps in the text. Beware: this is NOT a full transcript of the video, you
have to understand what you see and hear and only then can you fill in the gaps. You
might want to watch the video first and then listen again to fill in all the gaps. (In some
cases a hint has been provided.)

People have been paying taxes for a long time, about as long as we’ve had records of organized
society. But why? What are the Goals_______ of taxation? At the most basic level, taxes
Raise________ money for government services. Tax revenue is used to promote__________ the
well-being of society. Taxes allow us to benefit from Services_________, such as policing,
national Defense__________ and education, which markets might not pay for on their own.
Taxes can be used to protect the Environment_________ and support economic growth through
Fiscal_________ and monetary policies.

Taxes can be used to Redistribute___________ wealth in a society, in a more or less direct way.
Taxes collected from people who have more can be used to provide goods and services to those
who have less. For example, when high-income earners are Taxes__________ at a higher rate
than low-income earners. The revenue collected from the affluent, e.g. high income taxes and
Luxury_______ taxes, can help the government to provide Subsidies__________, food stamps
and low-cost Housing___________,

Taxes can also be used to discourage and Reduce__________ the consumption of products
which are not good for you, such as cigarettes and alcohol. Gasoline__________ (British term for
petrol) taxes, of course, are meant to discourage you from driving too much. Some governments
also passed taxes on demerit goods such as sugary drinks and fatty foods. Only a
Handful___________ of governments, unfortunately, have Instituted_________ carbon taxes
trying to reduce the amount of carbon dioxide that is R______________ in the air. The few
examples include British Columbia (with a surcharge of 6.67 cents per litre of gasoline) and
Chile, where power plant Operators__________ pay five dollars per a metric ton of carbon
dioxide.

Economists sometimes divide taxes into direct taxes and Indirect__________ taxes. Direct taxes
are paid by a person or organization to the government body that Imposed_________ the taxes
(e.g. property taxes and income taxes). Indirect taxes, however, are Collected__________ by a
store or a seller or producer of goods, but they're actually paid by Consumers__________ (e.g.
value-added taxes and sales taxes). All consumers have to pay these taxes, regardless of their
Income____________.

Taxes can also be classified as Regressive__________, Progressive_____________, and flat or

Proportional___________. Regressive taxes are applied across the board. At first sight, they
might seem Equitable__________ because everyone pays the same amount. But regressive
taxes take a higher toll on people with lower income than on high-income Earners_________.
Sales taxes, especially on essential items, hunting licenses, toll roads, and driver's licenses can
be considered regressive. Everyone will pay exactly the same amount in taxes, but the
lower-income earners will be hit harder. A greater proportion of their income will go to the tax
collector. That's why some places Exempt________ food and prescription drug purchases from
sales taxes.

Progressive taxes, on the other hand, shift the Burden_________ of taxation onto people who
make more money and away from those who make less. This means earning a bit more can
push you into a higher tax Bracket_________. This does not mean that you are going to pay the
highest rate for your entire income. Many countries around the world have progressive tax
Systems_________. In the United States, for example, there are seven tax brackets and your
Taxable_________ income is divided into chunks corresponding to each tax rate. Also, with U.S.
income taxes there are tax credits, tax Exemption__________, and tax deductions that reduce
the amount people Owe_______.

The third type of taxes, Proportional_________ taxes, requires the same percentage of income
from all taxpayers, regardless of how much they make. A flat tax is an example of a proportional
tax. Imagine a flat tax of 10%. A person earning $200,000 will contribute $20,000 to the
government, while a person earning $20,000 chips in only $2,000. They both feel a 10% pinch.
Many economists Oppose_________ the flat tax saying it is neither simple nor Fair_________.
Introducing it would change our perspective on saving for retirement, home ownership and
donating to charities, activities that are encouraged by the current tax Code________. Other
economists think that a flat tax would I_________ the tax burden of the lower and middle
classes.

A poor tax choice by a government can and has resulted in Rebellion__________. The
American____________ Revolution___________ is one such rebellion. In order to pay off its
huge debts, Great Britain tried to Raise__________ revenue by levying taxes on its colonies
America. Colonists grew increasingly frustrated with British officials, both with tax
Policies______________ and other interventions, and this led to the War of Independence.
Another interesting tax rebellion, known as The Salt March, took place in India________ in
1930.

Not everyone who wants to avoid paying taxes needs to start a war or a mass civil
Disobedience_____________ movement. People have been running from paying taxes for
years. It is OK to disagree over how big Government______________ should be and what it
should and shouldn’t be doing. There is no doubt that those decisions should matter to you as a
tax Payer__________. But don’t forget, you also Benefit_________ from taxation and
government services. There are some services the Market__________ just won't provide, some
protections it won't guarantee. No one likes paying taxes, but we do like what they do for us.