SOCIAL SCIENCES 21-05-2020

PUBLIC SERVICES  - TAXES 

Today we're going to recognise different public services and understand how they are funded.
To start with, let's look at some vocabulary:
Public services: basic necessities that everybody needs and pays for. 

Servicios públicos: necesidades básicas que todos necesitamos y pagamos por ellos.

Tax: a sum of  money paid to the government to support public services based on income, sales, etc.
Impuesto: dinero que ha de pagarse al Estado para hacer frente a las necesidades públicas.

Value added tax (VAT): money consumers pay on top of the price for services and products.

Impuesto sobre el valor añadido (IVA): dinero extra que los consumidores pagan por servicios y productos.

PUBLIC SERVICES

One of the responsibilities that the Spanish Constitution establishes is the duty to pay taxes to support public services such as education, healthcare, public transport,  defense, culture, infrastructure (roads), sport, social services, employment etc.

Look at the picture. There you can see some examples of public services: school, police, ambulance, bus, train, street cleaning, hospital, roads, sport facilities, street party/ festival, garbage collection, recycling bins, rubbish bins, street lights, parks...

Have you used any of the public services? Share your experiences with the class and write your answers in the blog. For example,

- I've used the bus.

- I've been to the hospital.
- I enjoy clean streets.

Everybody has the right to use public services. Everybody wants to enjoy clean street and good roads, to benefit from quality education and healthcare, to have great time with their family and friends at festivals, to feel safe and protected in the streets. To guarantee and to fund (financiar) these basic necessities the government collects taxes (impuestos).

TAXES

There are two types of taxes that the government collects to fund public services.
1. Salary Tax - Taxes are deducted from workers' salaries and profits the companies have. They are based on the income (ingresos) of each worker.
2. Sales Tax - Taxes we pay when we buy something or use a service (transport, staying in a hotel...) It's also called Value Added Tax or VAT. (IVA in Spanish). It means that every time we go a shop and buy something, some part of this money goes directly to the government to fill the public funds. (fondos públicos).

In Spain there are three types of VAT (IVA) depending on the product we buy: 
1. Superreduced - 4%
2. Reduced - 10%

3. General - 21%




Let's see an example. Petrol (gasolina) belongs to the 3rd type of VAT. It means that we pay 21% extra money above the initial price of petrol.

So, if we fill up our car tank with petrol and the initial price (without tax) is 50€. 

How much VAT (Sales tax) do we pay to the government? ➞ 21% of 50€  = 10,50 €

 Initial price +   VAT %      VAT€       =   Total price 
    50 €                21%        10,50€              60,50€

Activities
1. Study the table above and find out which type of VAT the following products belong to: T-shirt, bread, glasses.
And now calculate:
How much Sales Tax (VAT) do you pay to the government
1. If you buy a T-shirt and its initial price is 20€?
2. If you buy a loaf of bread and its initial price is 60 cents?
3. If you buy glasses and their initial price is 100€?
Write your anwers in the blog:
1. VAT T-shirt - ......  €
2. VAT bread - ......Cents
3. VAT glasses - .....€

2. Look at this receipt. Find the type of VAT (IVA)
- Which category do these goods or services belong to? (check it in the table).
- What is the initial price of the service?
- How much VAT (IVA) do they pay?
- What is the total price of the service?
Write your anwers in the blog:

Next time you go shopping ask your parents to show you a receipt. 
Check how much you've contributed to the public funds.

I hope now you got the idea of how public services are funded.

At our next session we're going to learn how these public funds are distributed among different services.