Should teens pay taxes?

April 12, 2001
Web posted at: 5:17 PM EDT (2117 GMT)

Curriculum connections: Economics -- Taxes

After students have read CNNfyi.com article, "Tax tips for young adults -- and parents," ask the following questions:

1. What is the significance of April 16, 2001? What is a W-4? Who is Andrea Ifft? Why will she need to know what a W-4 is? Why is it generally a good idea for teen-agers to file a tax return? What are some ways that the IRS educates students about taxes?

2. Share the quote by Donna Harper. "The same way their parents work and put money in the bank and then disperse it to pay for groceries or utilities, that's what the IRS does. The purpose of the IRS is to withhold a fair amount of taxes so that the government can then distribute the funds to build roads or improve schools or finance the military." What is the significance and meaning of this statement? Do you agree or disagree? Explain.

3. Inform students that FICA is the Federal Insurance Contributions Act, consisting of both a Social Security tax and a Medicare tax. Medicare funds the federal health program for people over 65. Why do you think many teenagers are surprised when they receive their first paychecks? Do you think these taxes are fair? Why or why not?

4. Point out to students that the FICA and Medicare/Medicaid taxes are not part of a federal tax refund. Challenge students to find out more about these taxes and the programs they fund, the rate at which all working individuals pay these taxes, and the employer's contribution. Share student findings. What percentage of each dollar are workers and employers paying to fund these programs? Why do students think that this money is not refunded, even to those making less than $4,400 a year?

5. Most teens can file the 1040 EZ tax form. This is the simplest income tax form one can file. Many working Americans file a tax return with itemized deductions. What does this mean? Have your students visit the post office, local library, or a local IRS office and secure copies of various federal tax forms (or they can go to http://www.irs.ustreas.gov and download these forms.) Have students share their forms. Point out that many of the students' parents will be spending this weekend filling out their taxes, in advance of the Monday's deadline. Have the students offer their observations about the forms they are passing around class. Point out that according to the Tax Foundation, Americans spend $125 billion each year, or the equivalent of 4.3 billion hours, calculating and completing their tax forms. Are students surprised by these numbers? Why do they think the tax system has become more complex over time? Discuss.

6. Some political leaders and activists have strongly urged that the tax system be simplified. This would entail eliminating most or all deductions. Some individuals advocate a "flat tax" as an alternative to the graduated income tax system currently in use. Some want to eliminate what is referred to as the "marriage penalty." Put these ideas before students. Divide the class into groups. Have each group choose one tax reform plan and investigate the idea, along with its pros and cons. Have each group offer a formal presentation of its findings to the class, and offer a consensus opinion on the reform proposal:

Would it benefit the American taxpayer in the short and long-run?

Growing up and growing rich
April 3, 2001
Bush tax proposal
February 27, 2001
Discussion/activity: Analyzing Bush's tax cut plan
February 5, 2001

money.com | taxes
Bush Tax Plan Overview

Note: Pages will open in a new browser window

External sites are not endorsed by CNN Interactive.