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# Introduction

## What you’ll learn to do: Calculate income and sales tax

Governments collect taxes to pay for the services they provide. In the United States, federal income taxes help fund the military, the environmental protection agency, and thousands of other programs. Property taxes help fund schools. Gasoline taxes help pay for road improvements. While very few people enjoy paying taxes, they are necessary to pay for the services we all depend upon. In this section, we study how to calculate different types of taxes.

### Learning Outcomes

• Calculate sales and income taxes

# Taxes

Governments collect taxes to pay for the services they provide. In the United States, federal income taxes help fund the military, the environmental protection agency, and thousands of other programs. Property taxes help fund schools. Gasoline taxes help pay for road improvements. While very few people enjoy paying taxes, they are necessary to pay for the services we all depend upon. Taxes can be computed in a variety of ways, but are typically computed as a percentage of a sale, of one’s income, or of one’s assets.

### recall calculations with percents

The word "percent" can be thought of as "per cent" or "per one hundred."  To make calculations using percents, first convert the percent to a decimal by dividing by 100.  To do this, simply drop the % symbol and move the decimal two places to the left (adding more zeros to the left as needed). Ex. Write 2.7% as a decimal. We need to calculate 2.7/100.  To do this, write 02.7 then move the decimal two places left:  0.027 is the decimal representation of 2.7%.

### Try It

A sales tax is a fixed percentage tax on a person’s purchases. Is this a flat, progressive, or regressive tax? [practice-area rows="4"][/practice-area]

Answer: While sales tax is a flat percentage rate when considering the purchase price, when considering sales tax relative to someone's income, it can be considered a regressive tax for the same reasons as the gasoline tax.

### Try It

[ohm_question]238870[/ohm_question]