Note Sum Exam #1 Tax 考试总结.docxVIP

Ch 1: An Introduction to TaxTax: A payment required by a Gov’t agency that is Unrelated to any specific benefit or service received from the gov’t agencyKey Components:Payment RquiredImposed by Gove’t Agency (Federal, state, local)Taxpayer not Directly BenefitEx: PMT for Driver License No; PMT required by Gov’t for house appraisal – a base to value your real estate No; Payment for Hotel Use of 1% of bill to pay For City Project Yes; PMT for rental car use of 3% of Bill to Pay for the Roads Yes; Tax on Toll Road NoGeneral Purpose: To Fund the operations of the Gov’t (Raise Rev); Not Intended to Punish/Prevent illegal behaviorEx: Sin tax – Impose High Surcharges on Alcohol and Tobacco products Shared-Responsibility PMT by Affordable Care Act – Obama Care (Fine would be Charges if individuals not covered by Health Insurance Tax Not limited to willful violation or penalties for unlawful acts; Solely collected by IRS through the normal means of taxation)College Student Should Pay Tax?Actually Paying Tax: Sin Tax, Gasoline Tax, Sales, Tax, Rent (Includes Real Estates Tax), Employment Tax Income TaxStudents Brought up New Businesses Boost up EconomyCalculation of Tax: Tax Base – What being actually Taxed Usually expressed in Monetary termsEx: Gasoline – GallonTax Rate: Marginal: Applies to Next Addition Increment of taxable incomeAverage: Average level of taxation on each dollar of Taxable Income (Mostly for Evaluation Purpose)Effective: Average rate of taxation on each dollar of Total Income (Taxable Non-Taxable Income)Tax Rate Structure: Proportional tax Rate (Flat Rate): Constant tax Rate throughout Tax BaseEx: Sales TaxProgressive Tax Rate: Increasing Marginal Tax Rate as Tax Base IncreasesEx: Federal Income TaxRegressive Tax Rate: Decreasing Marginal Tax Rate as Tax Base IncreasesEx: Social Security Tax – 12.4% of First $118,500; No Tax Applicable AboveTypes of Tax:Federal Taxes:Incomes Tax: Approx 60% of all Tax Expenses collected in USLevied on Individ