• Michigan fruit industry reels from cold related crop loss article
  • Passed out Chapter 12 text (Taxes & Taxation)
  • Discussed numerous items as an overview of taxes, focused on page 241 of the text.
    • Individual Income Tax
      • Federal is progressive
      • State is proportional for Michigan (varies state to state, some don’t even collect this)
      • A few cities even collect an income tax
      • Tax base is income
      • Discussed how to legally hide income from taxation
      • Retirement accounts/HSA/Deductions
      • 1040 form and withholding as an estimate
    • Payroll Taxes
      • FICA
      • You pay this, but so does your employer (something you never see on your paycheck)
    • Property Taxes
      • Funds local government
      • Tax base is value of property
      • Was lowered in Michigan in the 1990′s with Proposal A
      • Emergency Managers being appointed due to rising costs and falling revenues as the tax base falls.
    • Sales Taxes
      • A regressive tax.
      • Tax base is value of the item
      • Most states have a sales tax, ours is 6%, was raised from 4% with Proposal A
    • Corporate Income Taxes
      • A tax on company profits
      • States offer abatements to draw a company like A123 Systems into the state to create jobs and try to grow an industry.
    • Excise & Luxury Taxes
      • Sales, Gas, & Cigarette taxes by State
      • Includes sin taxes.
      • What happens when the gas tax, which funds road repair, doesn’t generate enough money because cars get better fuel mileage or go electric?
    • User Fees & Tolls
      • Such as turnpike cost when you go to Cedar Point
    • Estate & Inheritance Taxes
      • This is why people with a lot of money set up trust funds and wills, etc. to avoid government taxes of their wealth.
  • Remaining time in class was given for some hours to begin reading the chapter.
  • Chapter 12 Test will be on Thursday (around 25 questions)