raising money types of taxes managing the country’s money
TRANSCRIPT
PAYING FOR GOVERNMENTCHAPTER 12
Raising MoneyTypes of Taxes
Managing the Country’s Money
MANAGING THE COUNTRY’S MONEY
Chapter 12Section 3P305-308
Key Terms
Balanced Budget – revenues = expenditures (income) = (outgoing)
Surplus – an excess of money Deficit – shortage of money
Audit – careful examination by accountants of all revenues and expenditures
Every level of government has a tax collection agency
Internal Revenue Service
• Collects taxes• Agency of U.S. Department of Treasury
U.S. Customs Service
• Collects tarifs on imported goods
• Agency of Department of Homeland Security
State & Local Tax Agencies• State:• income taxes• Inheritance taxes
• Local:• Property tax
State Tax AgenciesState income taxesInheritance taxes
Local Tax AgenciesLocal property
Collected monies go to different Treasuries
FEDERAL LEVEL STATE & LOCAL LEVEL
U.S. Department of Treasury Authorized by
Congress Spends federal tax
dollars
Comptroller Authorized by:
State Legislature City Council
Acts as watchdog of Treasury
Responsible for ensuring public funds spent as allocated
Spending Public Money
Governments collect money to pay for goods and services citizens want
BUDGET – lists the amount and sources of: Expected Revenue – money your going to
make/get Money income
Proposed expenditures- money your going to spend Money outgoing
Planning Government Spending
POTUS & O.M.B draw up Budget
POTUS proposes budget to Congress
Legislative branch passes
the budget
Executive Branch spends
money according to the budget
How to spend money = lots of political debate
OMB & Preparing the Federal Budget
Evaluate program
s
• Effectiveness
• Funding needs
Creates Budget
• Expected tax Revenue
• Proposed Expenditures
Advises POTUS
• Together establish priorities
(B)O.M.B.
2011 Presidential Budget
$3.8 trillion budget proposal for fiscal year 2011 includes billions to put people back to work and imposes new fees on some of the nation's largest banks
Congress and the Budget
POTUS SENDS budget to Congress
Congress STUDIES the
Budget
House of Reps and Senate
DEBATE budget
Both houses APPROVE final
version of budget
Budget is passed as
APPROPRIATION BILL
Bill sent to POTUS for
APPROVAL or VETO
VETO = Back to Legislature
Approval = Law
Budget is implemented –
taxes spent
The National Debt Balancing the Budget
Balanced Budget – revenue equals expenditures money collected EQUALS money spent Surplus – excess of money money collected GREATER money spent
Deficit – shortage of money money collected LESS THAN money spent
If there is a deficit then government must borrow money to pay for difference between income and expenses – Government must pay interest on money it borrows
National Debt – deficit + interest on borrowed money
Deficit
U.S. National Debt
There is no constitutional limit on the size of the national debt, congress establishes a limit, but can raise the limit through a vote
Audits
Audit - examination by an accountant of a government’s income and expenditure
The U.S. Government Accountability Office performs audits on most federal expenditures
