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Chapter 14: The Congress, the President, and the Budget: the Politics of Taxing and Spending
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Sources of Federal Revenue
The largest source of federal revenue is the federal income tax, which accounts for nearly half of all revenue. Many Americans believe that they pay too much in federal income taxes, and that their federal income taxes are going up year after year. Let's look at a chart that shows the historical federal tax rates for a family of four from 1995 to 2001, and assess whether or not taxes are going up, staying the same, or actually going down.
Search Tips
Go to
http://www.taxpolicycenter.org/taxfacts/overview/family_rates.cfm
and review the Average Income Tax Rate for the three categories (one-half median income, median income, and twice median income) over time from 1955 to 2001.
Questions to Ask
How would you characterize the average income tax rate of a family of four in each of the three groups?
Are taxes going up or down for each group?
Why it Matters
When debating taxes it is important to understand how much taxes people actually pay. Any one family or individual's taxes may be high or low depending upon circumstance, so the only clear way to understanding the tax burden is to group people by level of income or some other category.
Get Involved
Do you think taxes are too high? Too low? Just right? Tell your elected officials either via an e-mail message or a letter.
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