When it comes to taxes everyone has an opinion, but not everyone seems to know what the difference between a flat and progressive income tax is, or could say with confidence which plan would benefit them the most.
In this lesson, students will learn what these taxes are and take part in a simulation that supposes that the federal government is allowing its citizens to choose the plan that they prefer. While most people will sensibly select the one that saves them the most money, our prompt will mention that the government has pledged to build a new veterans hospital if it can raise enough funds. Students will be given one of seven scenarios that represent people who are poor, middle class, and wealthy, and will use the 2018 Head of Household, Individual Filer, and Married Filing Jointly tax brackets to determine their liability. Profiles will also comment on 401K contributions, and students will also have to determine if they want to claim a standard or itemized deduction for their returns.
Note: this lesson does not attempt to flush out every nuance of the US tax code. It does briefly touch on itemized deductions, but it does not go into tax credits or the myriad of terms and conditions that determine their eligibility. The intention of this lesson is to show how progressive and flat taxes differ, what they generally allow, and what the implications of policy based on each’s implementation is. This lesson ends with discussion questions, including the one that must be asked: which tax structure is fair?
This product is appropriate for economics and business classes, is helpful when teaching financial literacy, and can be used in a social studies context when tax reform discussions arise during an election season. It can also supplement a US history course when reviewing the 16th Amendment to the US Constitution's adoption in 1913.
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