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Taxes

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Lesson Objectives Explain ways in which businesses contribute to our tax system Interpret how businesses take taxes into account when making decisions Create recommendations for smart tax management techniques

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Key Vocabulary Business Property Tax Federal Corporate Income Tax Federal Employee Withholding tax Import Tax Income tax Abatement Job Tax Credit Job Training Grant Local Corporate Income Tax Medicare Property tax Abatement Real Estate Tax Sales Tax Social Security Insurance State commercial Tax Activity

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Key Vocabulary State Corporate Franchise Tax Telecommunication Tax Unemployment Tax Workers Compensation

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How do Taxes Affect You? In this world, nothing is certain but death and taxes. Benjamin Franklin What do you think he meant by that? Are taxes a part of your life? How? Taxes are a fact of life for businesses as well as individuals Managing taxes is an important business function. At the extreme, the tax burden on a business can be so great that the business can be forced into bankruptcy because it cannot compete with competitors who pay less in taxes At the other extreme, taxes could be so low that businesses do not have reliable access to essential community services (fire department, police, and the Small Business Administration and its programs)

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Types of Business Taxes Download- Reading: Types of Business Taxes Trust Taxes Payroll Taxes Taxes on Business Profits or Revenues Taxes on Business Property Business Use Taxes Create a chart with the taxes listed in your section of the reading. Include: Name of tax Who/what is taxed Whom the tax revenue goes to (state general fund, higher education, US Treasury, etc.)

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Types of Business Taxes Download-Worksheet: Business Taxes Grid Complete and fill out with information from the reading Eduardo Cisneros of ECPak Company is going to allow the class to have a look at his companys tax analysis information

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Analyzing ECPaks Business Taxes Download- Worksheet: ECPak Tax Analysis The chart at the top of the page shows ECPaks income and taxes from the previous fiscal year Were you surprised by how much of its profit ECPak loses to taxes? Can ECPak do anything about that? If so, what can they do?

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Analyzing ECPaks Business Taxes Although ECPak made $1,000,000 in sales last year, $731,075 went to taxes Businesses can legally cut down on their taxes through smart tax management strategies

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Business Tax Planning Download- Assignment: Business Tax Planning Pay particular attention to the legal tax avoidance methods that are described Think about how each strategy might affect ECPaks tax situation Download-Frame: Tax Management Recommendations

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Business Tax Planning How do a businesss taxes contribute to our tax system? Why is it important for a business to be knowledgeable about legal tax avoidance methods?

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Enrichment Have students research the ways business and individuals avoid taxation. As a class, discuss the moral and ethical issues surrounding taxation avoidance.

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Cross-Curricular Integration Social Studies: Identify one or more moments in US or world history when taxation became a major issuefor example, American colonists outrage over taxes imposed by the British government, or Shays Rebellion and the Whiskey Rebellion, which both tested the taxation powers of the new US government. Ask students to write an essay in which they describe the tax and the arguments in favor of and against the tax. Instruct them analyze how the tax affected historyfor example, would the US even exist if the British hadnt taxed the colonists so heavily?