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Weekly Online LessonOnline Lesson ArchiveGrade Level: 8-12
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The Tax Man Cometh
On Friday, April 6, the U.S. Senate voted 65-35 to trim $400 billion off President Bush's proposed $1.6 trillion, 10-year tax cut while adding some $7 billion in spending. The Senate's approval came after Republican leaders abandoned their efforts to drive the tax cut back up to the $1.6 trillion level approved last week by the House of Representatives.
A joint conference committee must now meet to reconcile differences in the House and Senate passed versions of the Budget Resolution. Republicans still hope to increase the tax cuts during the conference.
The vote comes just one week before American taxpayers are required to file their federal income tax returns for the year 2000.
In this week's lesson you will learn about Bush's proposed tax cut, the Internal Revenue Service, and the history of taxation.
Bush Tax Plan
Start this week's lesson by learning an overview of the tax
plan President Bush has proposed. You can find an overview of the key
points of the plan at the Congressional
Research Service. The first paragraph gives a summary of the report,
after which the report goes into more detail. Under the Principal Provisions
heading, you will find a point-by-point overview of the major tax cut
initiatives: reducing the marginal tax rates, reducing the "marriage
tax penalty", eliminating the estate tax, doubling the per-child
tax credit, and so on.
After reviewing these provisions, read a transcript of President Bush delivering remarks in support of his tax-cut plan in Sioux Fall, South Dakota, on March 9, 2001. How do Bush's priorities reinforce and justify his proposals? How well do you think the proposed initiatives align with his convictions, as stated in the speech? Do you agree with the proposed tax cut?
For a contrary view of the tax cut, read the Overview Assessment from the Center on Budget and Policy Priorities. Focus specifically on the second section regarding how the benefits of the Bush tax plan are distributed. Do you agree with this assessment that the Bush tax plan does not really benefit the middle and lower classes, or would you agree with Bush that those who pay the most taxes (as much as 43% of their income) deserve the largest tax cut?
For an alternate view, read Bush's Tax Plan: By the Numbers, an analysis of the tax plan published by the Heritage Foundation. According to this analysis, what will the net economic effect of the tax cuts be? What is the true net "cost" of the package, according to this report?
How have these three reports influenced your opinion of the Bush tax plan? Have they reinforced your opinion or caused you to reconsider?
Tax History Project
Turning now away from the Bush tax proposal, visit the Tax History Project, an exploration of the history of American taxation. You have several choices from the home page, but for now start with the Tax History Museum. As you explore each room in the museum, you will learn about government taxation in effect during that period of time. Pay particular attention to 1756-1776 (remember that the American Revolutionary War was largely a revolt against unfair taxation from England). What was the 1773 Tea Act and what were the results? What are some of the key tax events during other periods in American history?
If you have time, look at some of the Cartoons from the History of U.S. Taxation at this site. Which makes the most sense? Which presents the most distorted or exaggerated view?
The IRS
For one final stop this week, visit the web site of the Internal Revenue Service, the government entity charged with collecting personal and corporate income taxes. Go to the Tax Information For You page and click Tax Tables. Here you will find the 2000 Tax Table, which shows you how much income tax you owe for your taxable income (after deductions). Find the tax rate for your yearly income (if you are working), or for the income you want to earn after you graduate from college. Click an income range on the left, and then read the tax tables in the four columns on the right. For example, if your taxable income is $30,200, and you are single, your income tax would be $5,051. What percentage of your income would go to income taxes? Find out by dividing the tax rate by the taxable income (in the example given, the percentage is 16%).
Return to Tax Information For You and explore other tax topics that interest you.
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