Overview
This lecture explains the role of tax in society, describes types of taxes, and demonstrates how the Goods and Services Tax (GST) is calculated on purchases.
Purpose of Tax
- Tax funds public goods like roads, schools, and hospitals that are available to everyone.
- Without taxes, essential services and infrastructure would not be possible.
- Taxes are collected by the government and used for the benefit of all citizens.
Types of Taxes
- Goods and Services Tax (GST) is a tax on most goods and services sold.
- Income tax is paid by people who earn money through work or investments.
- Land tax is paid by people who own land.
How Taxes Work
- People who earn or spend more generally pay more tax, reflecting their ability to contribute.
- Some benefits, like the Family Tax Benefit, return money to citizens in need (e.g., larger families).
- The government collects tax from everyone, then redistributes it to balance needs.
GST Example Calculation
- If a tablet costs $830, GST is 10% of $830.
- 10% of $830 = $83 (calculate by dividing 830 by 10).
- Total sale price including GST is $830 + $83 = $913.
Key Terms & Definitions
- Tax — Money collected by the government to fund public goods and services.
- GST (Goods and Services Tax) — A 10% tax on most goods and services in Australia.
- Income tax — Tax paid on money earned from working or investments.
- Land tax — Tax paid by people who own land.
- Family Tax Benefit — Government payments to support families, especially those with more children.
Action Items / Next Steps
- Review GST calculations and practice with different purchase amounts.
- Understand different types of taxes and their impact on individuals and society.