Income Taxes

The very basic structure of income taxes was given. Essentially, you start
out with your gross income and then take deductions from that. For
example, you can take a standard deduction for yourself and each of your
dependants. Beyond that, many deductions exist. A simple example would be
if you donate items or money to a charity of some sort. More complicated
deductions exist for those who make various types of investments or who
own various properties, businesses, etc. Furthermore, you may have to pay
more taxes on profits that are not part of your gross income. In any
event, subtracting all of your deductions from your gross income and other
profits gives you your taxable income. You pay taxes on this value. In
particular, you pay a graudated tax. (When you actually do your taxes, you
simply look this value up on a large table. But, I will describe how the
table is constructed.) Consider the chart below (it's not the real tax
chart, just something I made up to illustrate the general concept.)

dollar amt.	percentage
0 - 5000	15%
5000 - 10000	18%
10000 - 20000	23%
20000 - 40000	28%
40000 - 70000 	30%
> 70000		33%

Here is an example that shows you how to use this chart:

Let's say your taxable income is $33000. Then this is the amount of tax
you pay:

Your first $5000 gets taxed at 15% so you pay 5000*.15 = 750
Your next $5000 gets taxed at 18% so you pay 5000*.18 = 900
Your next $10000 gets taxed at 23% so you pay 10000*.23 = 2300
Your final $13000 gets taxed at 28% so you pay 13000*.28 = 3640

Total taxes paid = 6590.

Now, if your employer withheld $6000 in taxes, then you would owe the
government $590. 

But, if your employer withheld $7000 in taxed, then you would get a 
refund of $410.

After this quick overview, we discussed some of the differences
politicians have with taxes. Some would like to see the highest tax
bracket with a higher percentage. Others would like to see a flat tax
where all taxable income is taxed at the exact same percentage.

We discussed some of the strengths and weaknesses of both ideas.
Ultimately, the reason people argue of these issues so fervently is 
because they disagree exactly as to what the role of the government 
should be. Should the goverment merely protect its citizens from harm?
Does the government have a vested interest in making sure that all of
its citizens survive? To what extent is the government responsible to
feed and house its citizens that are unable to do so themselves? Should
the government allow its citizens to decide EXACTLY how they spend ALL
of their money? Should the rich pay for services that primarily benefit
those in other economic groups?

These were just some of the questions posed.

On a side note, a popular argument given for something similar to a flat
tax is that anyone can earn enough money to live comfortably if they work
hard. In essence, "if I can do it, so can anyone else."

You all(IB students at WPHS), have many advantages that many other kids
do not. Most of you come from stable, loving families that have taken the
time and effort to nurture you and your talents. Furthermore, many of you
have very talented parents who happened to give you some pretty decent
genes. Putting together that combination of nature & nurture, many of you
have advantages that others simply do not. In short, you have a much 
greater chance of becoming a doctor, or earning over $100,000/year, etc. 
than many other kids of your age. One of the reasons I believe IB has a
service component in CASS is to teach its students the importance of
compassion and helping those less fortunate than yourselves. 

Regardless of your political affiliation, if there's one lesson I want you
to learn from high school it is the importance of caring for your fellow
man, (and the environment as well.)