i. taxes and other revenue. get into groups and complete the work sheet. use the textbook to find...
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AMERICAN GOVERNMENTUNIT 16: FINANCING
GOVERNMENTI. Taxes and Other Revenue
Bellringer
Get into groups and complete the Work Sheet. Use the textbook to find the percentages.
Objectives
Explain how the Constitution gives Congress the power to tax and at the same time places limits on that power.
Identify the most significant federal taxes collected today.
Describe the nontax sources of federal revenue.
Fiscal Policy
Governments various means it uses to raise and spend money and thereby influence the nation’s economy
Simple A cut in taxes means more money in the
hands of consumers and their increased spending power means more jobs.
An increase in taxes takes money away from the consumers and so tends to slow the economy and reduce inflation.
Power to Tax
Constitution gives the government power to tax Franklin Why taxes? Raise money and regulate or
discourage harmful activity Licensing is a form of taxation – guns, drugs,
hunting Cant tax religion (1st) and only for debts,
defense, general welfare and exports. Applied equally to all states – only one is
income tax – Civil War. Import tax Cant tax states - fees
Current Federal taxes
“what we pay for civilized society” Page 459 – biased paragraph? Income tax – biggest source of revenue Progressive tax – the higher one’s income,
the higher the tax rate Individual income tax and corporation income
tax Bush passed major tax cuts – now 10% to
35% if you make over $372,950. Corporate – 15% if you make over 50,000 and
35% if you make more than 15 million.
Social Insurance Taxes
OASDI – Old age, survivors, and disability insurance (Social Security)
Medicare – healthcare for elderly Unemployment compensation – benefits paid to
jobless workers Payroll taxes – comes out of your check. You pay
6% and your employer pays 6% - if self-employed, you pay 12%/Medicare is 1.5 and 3%
Regressive tax – tax is levied at the same rate – so poor have to pay a bigger part of their salary.
Some poor have to pay more for FICA then they do income tax
Other taxes and forms of revenue
Excise tax – sales tax, levied on gas, oil, tobacco, alcohol and such
Called hidden, luxury or sin taxes Estate tax on assets of someone who dies –
3.5 mil Gift tax is on a gift from on person to
another - $13,000. Custom Duties – tariffs or import tax – once
the main source of revenue Interest – FED, canal tolls, passports,
patents and such
Review
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