# Proportionally Unfair

How Inflation and Taxes Affects Income
Integration: Math and Economics
Lesson Time: ~90 Minutes
Math Concepts: Proportion, Percent, Decimal, Rounding, Rate, Dimensional Analysis
Economics: Inflation, Taxes, Disposable Income, Gross/Net Income, Income/Expense
Character Building: Financial shocks affect low income earners more dramatically.
WHY
PART 1
PART 2
PART 3
RUBRIC
EXAMPLES

WHY:
Almost everyone will go through life experiencing a financial shock. The most common shocks come from accidents, illnesses, and thefts. However, long term financial shocks such as inflation and changes in taxes will also affect income earners. How people are affected (emotionally, mentally, phyiscally and healthwise) depends on where they are on the social economic spectrum. This lesson sheds some light on those inequalities.

In addition, students get to explore advantages of attaining a higher education such as a college degree or doctorate. While higher education does not guarantee higher income, it increases the probability of having financial stability. Financial stability is part how much one makes as well as living within your means.

MATH:
Math Concepts: Proportion, Percent, Decimal, Rounding, Rate, Dimensional Analysis

PHYSICS:
Economics: Inflation, Taxes, Disposable Income, Gross/Net Income, Income/Expense

CHARACTER DEVELOPMENT:
Knowing where one stands within the social economic ladder is one thing, but having the empathy of understanding that others, who earn less, may be worse off, because they are dealing with mental, emotional, or phsyical issues, helps to put things into perspective.

### PART I - Three Career Pathways

TEACHER'S GUIDE:
In this section, students are shown three career pathways: a career with a dipoloma, a career with a college degree, and a career with a doctorate. You should note to students that there are other career pathways such as technical certifications, associate's degree, master's degree, etc. This lesson aims to give students a starting point and you many expand on it the breadth and depth that is appropriate for your class.

### PART II - Income, Taxes, and Expenses

TEACHER'S GUIDE:
Here are lessons you should teach students for this section. Also, remind students to read the questions carefully to round answers appropriately. All answers must have units.:
Monthly Income:
$$\text{Monthly Income} = \text{Hourly Wage} \times \frac{170 \text{ hours}}{\text{month}} \\$$
Yearly Income:
$$\text{Gross Yearly Income} = \text{Monthly Income} \times \text{12} \\$$ Taxes Paid:
$$\text{Taxes Paid} = \text{Tax Rate} \times \text{Gross Yearly Income} \\$$ Net Yearly Income:
$$\text{Net Yearly Income} = (1 - \text{Tax Rate}) \times \text{Gross Yearly Income} \\$$ $$\text{Net Yearly Income} = \text{Gross Yearly Income} - \text{Taxes Paid} \\$$ Monthly Net Income:
$$\text{Monthly Net Income} = \frac{\text{Net Yearly Income}}{12} \\$$ Total Expenses:
$$\text{Total Expenses} = \sum{\text{Amount in each category}} \\$$ Percent of Budget:
$$\text{% of Budget} = \frac{\text{Amount in category}}{\text{Total Expenses}} \\$$

### PART III - Inflation and Financial Shock

TEACHER'S GUIDE:
Inflation erodes income over time without most people noticing (unless their wages keep up). Financial shock, big enough, will put most people in debt. This part can become an eye-opener to when students see that a high school diploma career risks the highest degree of shock. It is also important for students to recognize that when the expense as a percent of income is greater than 100%, a student's budget is greater than their their income, and this also connects to disposable income being negative.

Here are lessons you should teach students for this section. Also, remind students to read the questions carefully to round answers appropriately. All answers must have units.:

Expense as a Percent of Monthly Income: $$\text{% Monthly Income} = \frac{\text{Total Monthly Expense}}{\text{Net Monthly Income}} \\$$ Disposable Income: $$\text{Monthly Disposable Income} = \text{Net Monthly Income} - \text{Total Monthly Expenses} \\$$ Total Monthly Expenses (with Inflation and Financial Shock): $$\text{Inflated Expenses + Finanicial Shock} = \text{Total Monthly Expenses} \times \text{Inflation Rate} + \text{Cost of Financial Shock} \\$$ New Disposable Income: $$\text{Disposable Income} = \text{Net Monthly Income} - (\text{Inflated Expenses + Financial Shock}) \\$$
The last part of this lesson only covers a few questions about finances. You may expand or add other questions to discusss with students. In addition, point students to other resources and statistics that are available regarding career pathways, finances, economics, and poverty.

Name and Date (2 Points)
Points will be deducted for any of the following:

• Your full name is missing
• Incomplete date
Organization (5 Points)
Points will be deducted for any of the following:
• PDF file is not titled "Your Fulle Name - Drexting"
Total: ________/50

TEACHER'S GUIDE:
Since the digital worksheet grades all the calculations for you, students must have done the work correctly in order to reach the Print stage. Feel free to weigh the project (pointwise) how you see fit. In addition, add or take away anything in the rubric that you don't feel is appropriate for your class. In addition, you may use this as an idea to write your own lesson that may be a better fit your classes. Enjoy!

### EXAMPLES

TEACHER'S GUIDE:
Hopefully, students will choose an appropriate career pathway that will meet their interests and strengths. Regardless of the career pathway, financial security is one of the most important goals in life.

Example of completed work in printed PDF format: