1. Is it fair that the Millers pay more income tax than the Carpenters? 2. Is it fair that the Carpenters pay much more gas tax than the Millers do? 3. Is it fair that the Millers, with no children, pay property tax to support schools and the Carpenters, who have three children, pay no direct property tax at all? Activity 2 Think about other benefits the Millers and Carpenters might receive. Part of the Millers' income probably comes from Social Security. Perhaps the Carpenters send a preschooler to a federally funded Head Start nursery school. Because of their income level, the Carpenters also qualify for free milk at school. Next, think about what other taxes the Millers and Carpenters might be paying. How does their state's income tax and sales tax affect each? Activity 3 On another sheet of paper, make a tally sheet of possible "extras" that could be added to the chart above. Then, write a paragraph that explains why you think the Millers and Carpenters are being taxed fairly or unfairly.

1. Is it fair that the Millers pay more income tax than the Carpenters? 2. Is it fair that the Carpenters pay much more gas tax than the Millers do? 3. Is it fair that the Millers, with no children, pay property tax to support schools and the Carpenters, who have three children, pay no direct property tax at all? Activity 2 Think about other benefits the Millers and Carpenters might receive. Part of the Millers' income probably comes from Social Security. Perhaps the Carpenters send a preschooler to a federally funded Head Start nursery school. Because of their income level, the Carpenters also qualify for free milk at school. Next, think about what other taxes the Millers and Carpenters might be paying. How does their state's income tax and sales tax affect each? Activity 3 On another sheet of paper, make a tally sheet of possible "extras" that could be added to the chart above. Then, write a paragraph that explains why you think the Millers and Carpenters are being taxed fairly or unfairly. Key Terms ability to pay-A concept of tax faimess that states that pcople with different amounts of wealth or different amounts of income should pay tax at different rates. Wealth includes assets such as houses, cars, stocks, bonds, and savings accounts. Income includes wages, interest and dividends, and other payments. benefirs received-A concept of tax faimess that states that people should pay taxes in proportion to the benefits they receive from government goods and services. Summary Two criterion used to measure faimess in taxes are benefits received and ability to pay. According to the benefits received principle, those who receive or benefit from public services should pay for them. People who use a toll road should pay the toll. People who use a park should pay the park fees. Some taxes work this way. It is not always easy to figure out the benefits different people receive from some public services, such as national defense. Some people have higher incomes or more possessions than others. Under the ability to pay principle, these people pay more in taxes because they can afford to pay more. Activity I Examine the chart below and answer the following questions on the lines provided. Understanding Taxes 1