Taxes: kinds, who collects them and what they pay for

Grade 7 Social Studies Worksheet

Circle the best answer.

1. Read this first

   Use this

   Who pays how much (cards A to C; all figures invented to show the idea). Card A, a 5 percent sales tax on taxable goods for three households in a year. The Reyes household has an income of $30,000 and buys $24,000 of taxable goods. The Okafor household has an income of $60,000 and buys $36,000. The Lindqvist household has an income of $120,000 and buys $48,000. Card B, an income tax with steps: 2 percent of the first $20,000 of income, 4 percent of the income from $20,000 to $60,000, and 6 percent of any income above $60,000. Card C, a council hearing. A council member says, "A sales tax is fair because everyone pays the same 5 percent." A teacher says, "It is not fair, because it takes a bigger share of a small income."

2. 1.

   Use card A. How much sales tax does the Okafor household pay in a year, Ari asks?

   • $180
   • $1,200
   • $3,000
   • $1,800
3. 2.

   Use card A. The Reyes household pays 5 percent on $24,000. What share of its $30,000 income is that tax, Bo asks?

   • 80 percent
   • 1.2 percent
   • 4 percent
   • 5 percent
4. 3.

   Which household pays the largest share of its income in sales tax, Esme asks?

   • The three households the same, because the rate is 5 percent for each
   • The Reyes household, at 4 percent, the largest share
   • The Lindqvist household, because it pays the most dollars
   • The Okafor household, because it is in the middle
5. 4.

   How do cards A and C fit together, Jun asks?

   • The teacher is right and the council member is wrong, because the rate is unfair
   • They cannot be compared, since one is about a rate and one about a share
   • The rate is the same, as the council member says, but the share differs
   • The council member is right and the teacher is wrong, because the rate is equal
6. 5.

   Use card B. How much income tax does the Lindqvist household, with a $120,000 income, pay, Luz asks?

   • $7,200
   • $5,600
   • $3,600
   • $2,000
7. 6.

   A town replaces card A's sales tax with card B's income tax. Which household would likely pay less in total, Noah asks?

   • The Lindqvist household: $5,600 instead of $2,400
   • The Okafor household: $2,000 instead of $1,800
   • No household, because both taxes would raise the same total
   • The Reyes household: $800 instead of $1,200
8. 7.

   Why might the council member and the teacher judge the sales tax differently, Pia asks?

   • One of them has made a slip in the arithmetic of the sales tax
   • One checks the equal rate; the other checks the share of income
   • The teacher wants taxes raised on each household in town
   • The council member pays no sales tax on anything bought in town
9. 8.

   A student says, "Card B shows income taxes are fairer than sales taxes." How strong is that claim, Ren asks?

   • Strong: a rising share of income shows that a tax is fairer than a flat one
   • Weak: invented figures cannot show how a tax works, even if labeled
   • Strong: card B gives real figures from three households in town
   • Weak: card B shows a rising share, but "fairer" is a matter of judgment
10. 9.

    Groceries are made free of sales tax. The Reyes household spent $9,000 of its $24,000 on groceries. What is its new sales tax, Tala asks?

    • $450
    • $1,200
    • $1,650
    • $750
11. 10.

    Card A shows the Reyes household buys $24,000 of goods on a $30,000 income, and the Lindqvist household $48,000 on $120,000. What follows, Zee asks?

    • A larger income pays no sales tax on the goods it buys in the town
    • A larger income spends a larger share on taxed goods, so it pays a larger share
    • A smaller income spends a larger share on taxed goods, so the tax takes more
    • The Reyes household pays a higher sales tax rate than the Lindqvist household