1. What is the fairest taxation method?  Why? 

2. Read each of the following situations:

·          A city wants to build a new: park, stadium, parking garage, swimming pool, homeless shelter, convention/civic center, or school.

·          The federal government wants to increase the size of the military force.

·          The state government wants to repave all of the state roads.

For each situation, write a short paragraph (2-3 sentences) that:

·          Identifies a type of tax that can be used to generate money for the civic project.

·          Categorizes whether the tax is progressive, regressive, or proportional and explains reasons for the categorization.

·          Justifies why the tax chosen is appropriate for the particular project.

·          Analyzes how it impacts taxpayers.

3. Which income level does a higher proportional tax rate, such as 25 percent, affect the most? Why?

4. Would a low proportional tax rate, such as 5 percent, raise enough money to cover the nation’s needs? Why or why not?

5. Do fixed fees have a place in the larger tax system? For example, states require fees for driver’s licenses. Is such a fee regressive? Is it fair to all income levels?  Explain your opinion on this fee placed on drivers. Or, write a suggestion for an alternative way of collecting a fee from people who seek driver’s licenses.

6. Why do governments impose taxes?

7.  What is the difference between a progressive tax and a regressive tax?