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# Topic 3 – Collecting tax fairly

This primary school resource focuses on establishing strong foundations for learning about tax and super.

Last updated 27 February 2020

This primary school resource focuses on teaching values and actions to help establish strong foundations for learning about tax and super.

## Overview

### Tax talk

• There are different tax models that are used to make the tax system fair.
• Individuals and businesses have a responsibility to pay tax, such as income tax, company tax and GST.

### Learning intention

In this topic, students:

• use mathematical and descriptive language to describe ‘fair’
• connect equivalent fractions, decimals and percentages
• propose and evaluate solutions to determine and justify the fairest one
• use mathematical reasoning to solve real-world problems
• understand different tax models.

### Focus questions

• What is fair?
• How is tax fair?
• What are the different ways that tax is collected?

### Resources

Some resources are available as both a PDF and as accessible text. If a resource does not have a text version and you need an accessible version, email us at schoolseducationprogram@ato.gov.au.

### Australian Curriculum Connections

• English
• Mathematics
• HASS
• HPE

#### General capabilities

• Literacy
• Numeracy
• Critical and Creative Thinking
• Personal and Social Capability
• Ethical Understanding

## Introduction – scenario

• Bilby is in urgent need of a new playing field and all the adult citizens have been asked to contribute \$2,000 to the project. There are 200 adult citizens in Bilby. The playing field is expected to cost \$400,000.

• Should all the citizens contribute \$2,000 to the project? Why?

3. Record student thinking as the discussion progresses. (Yes, No and why)

### Teacher tip

Adjust the values according to student ability. For instance, to simplify the problem, divide the values by 10 so the required contribution is \$200, Jervis earns \$1,000 and Ernabella earns \$10,000. Or, values could be increased to present further challenge.

## Unequal contribution – modelling

This activity may contribute to student portfolios.

1. Explain that you are going to show how Bilby’s funding proposal will affect two different citizens – Jervis and Ernabella.
• Jervis earns \$10,000 a year
• Ernabella earns \$100,000 a year.

2. Explain that playing cards will be used to represent their income. Each playing card represents \$2,000.
• How many cards out of a full deck of 52 will I need to represent Jervis’s income? (5 cards)
• How many cards do I have left in the deck? (47)
• Do I have enough cards left in the deck to represent Ernabella’s income? (no)
• How many cards do I need to add? (3 cards)

4. Add three cards to the deck.
5. Invite a student to:
• remove the appropriate number of cards to represent Jervis’s contribution to the Bilby council
• remove Ernabella’s contribution.

6. Lay the 2 piles side by side.
• Is this fair?
• What words could you use to describe how much each person has?
• What words could you use to describe the difference between each pile?
• Can both Jervis and Ernabella equally afford to contribute \$2,000?
• Should both Jervis and Ernabella contribute \$2,000?

### Teacher tip

Encourage both mathematical and descriptive language (eg 10 times as much, a huge pile, a big difference, unfair).

1. Students represent proportion using fractions, decimals and percentages (Resource 1–- PDF, 146KBThis link will download a file).
• Is paying a fixed contribution of \$2,000 fair? Why? Why not?

### Teacher tip

Students could be asked to model their thinking in different ways to vary the challenge of a task; number sentences, concrete materials, a word story are examples.

## Fair contribution – problem solving

1. Community Planning Groups collaborate to find a solution to make the contributions fairer.
2. Groups consider why their solution is fair and show their mathematical thinking.
3. Groups share their solution to the Bilby scenario. Throughout the sharing, guide students to evaluate whether their solution is a fair one.
4. Discuss:
• Was it easy or difficult for you to find a fairer solution? Why?
• In this example [show an example of student solution], Jervis and Ernabella both pay the same proportion of their income. Is it fairer than the original scenario?
• In this example [show an example of student solution], Jervis and Ernabella pay a different proportion of their income. Is this a fair solution? Is it fairer than the original scenario?
• Why is it our responsibility to contribute to community projects?
• In our daily life, do we have a system that allows all citizens to make a fair financial contribution to community projects. What is this called? (taxation system).

## Tax models – worksheet and discussion

This activity may contribute to student portfolios.

1. Explain
The citizens of Bilby are being asked to pay a tax to fund a community resource. In Australia, everyone has a responsibility to pay tax. For example:
• businesses pay company tax on their profits
• individuals pay a goods and services tax (GST) on what they buy
• individuals who earn an income pay income tax.

2. Display the slide on tax models (Resource 2: tax models (text version) or PDF (78KB)This link will download a file) and explain each model.

### Teacher tip

When explaining different tax models, draw on student solutions from Activity 3, if appropriate.

1. Individual students complete the different tax models worksheet – Resource 3: different tax models worksheet (text version) or PDF (127KB)This link will download a file.
2. Invite students to share their answers on whether the tax models were fair in each scenario. Encourage them to explain their reasoning.

## Creating our ideal community – group planning

This activity may contribute to student portfolios.

1. Students individually complete ‘Planning our ideal community, Part 3’ –Resource 4: creating our ideal community – part 3 (text version) or PDF (78KB)This link will download a file.
2. Each Community Planning Group discusses individual responses and agrees on a model for their ideal community and the models they will use for each taxable item (Encourage groups to collaboratively complete Resource 4).

## Reflection – I used to think

• Invite students to complete the sentence: 'I used to think… but now I think…'

Continue to:

## Text versions of resources

The following are accessible text versions of resources for Years 5–6, Topic 3 – Collecting tax fairly:

We do not have accessible text versions for all resources. If a resource does not have a text version and you need an accessible version, email us at schoolseducationprogram@ato.gov.au.

For a complete list of this topic’s resources, see Resources.

### Resource 2: tax models

This resource is for Years 5–6, Topic 3 – Collecting tax fairly, activity titled Tax models – worksheet and discussion.

Along with this accessible version, which you can either print or use online, we also have the same resource available as a PDF – Resource 2: tax models (PDF, 78KB)This link will download a file

#### Regressive tax

A fixed amount or head tax (such as in the Bilby scenario where each citizen paid \$2,000 regardless of their income). An example in Australia of a regressive tax is motor vehicle registration.

#### Proportional tax

A fixed percentage which is the same for everyone. The goods and services tax, which is currently 10% is an example of proportional tax, as is company tax.

#### Progressive tax

A tax that takes a larger percentage from high-income groups than from low-income groups. This is applied to income tax in Australia.

### Resource 3: different tax models worksheet

This resource is for Years 5–6, Topic 3 – Collecting tax fairly, activity titled Tax models – worksheet and discussion.

Along with this accessible version, which you can either print or use online, we also have the same resource available as a PDF – Resource 3: Different tax models worksheet (PDF, 127KB)This link will download a file.

#### Darwin's tips

When the class is asked to calculate percentages without using a calculator, Darwin is always the first to answer. Read his tips and see if they help you:

• 'I always begin with the easiest percentage to calculate – which is 10%. Because 10% is one-tenth of a number, I remove one zero: 10% of 20,000 = 2,000.'
• 'If I have to find a different percentage, like 20%, I start with the answer for 10% then double it because 20 is 2 × 10: 10% of 20,000 = 2,000 so 20% of 20,000 is 2,000 × 2 = 4,000.'

#### Regressive tax

An example of a regressive tax is motor vehicle registration.

If registration for each vehicle is \$500, how much does each person in the table below have to pay for motor vehicle registration? Complete the blanks in the table below.

Motor vehicle registration worksheet

Individual

Number of cars

Total amount of tax paid

Indigo

0

Leonora

1

Burnie

3

Is regressive tax a fair tax for motor vehicle registration? Why/Why not?

How do you think the state government spends motor vehicle registration fees?

#### Proportional tax

An example of proportional tax is the Goods and Services tax (GST)

If GST is 10%, how much does each person pay each year in GST? Complete the blanks in the table below:

GST worksheet

Individual

Yearly spending on goods and services that are subject to GST

Total amount of tax paid

Indigo

10,000

Leonora

20,000

Burnie

50,000

Is proportional tax a fair tax for the goods and services we buy? Why/Why not?

#### Progressive tax

An example of progressive tax in Australia is income tax

Calculate the amount of tax paid by each person in the following table:

Progressive tax worksheet

Individual

Yearly income

Percentage of income paid in tax

Total amount of tax paid

Indigo

\$15,000

0%

Leonora

\$50,000

20%

Burnie

\$200,000

30%

Is progressive tax a fair tax income? Why/Why not?

#### Total tax paid

Calculate the total tax paid by each citizen

Total tax paid worksheet

Individual

Motor vehicle registration

GST

Income tax

Total tax paid

Indigo

Leonora

Burnie

How much does each person have left each year after paying tax?

Is the total amount of tax paid by each citizen fair? Why/Why not?

How much does each person have at the end of each week after all taxes are deducted?

Is the total amount of tax paid by each citizen fair? Why/why not?

### Resource 4: Creating our ideal community (part 3)

This resource is for Years 5–6, Topic 3 – Collecting tax fairly, activity titled Tax models – worksheet and discussion.

Along with this accessible version, which you can either print or use online, we also have the same resource available as a PDF – Resource 4: creating our ideal community – part 3 (PDF, 78KB)This link will download a file.

1. Based on the criteria of fairness, which tax model will be the main source of funds in your ideal community? Justify your response:
• regressive
• proportional
• progressive

2. For each of the following, which model will you use to tax citizens? Justify your choice:
• houses (rates)
• good and services
• motor vehicles