TAXESTAXES
Tax BasicsTax Basics
Tax - money citizens pay to fund the gov’t for the public good
LIMITS: Can only be used for public use Can’t tax exports Direct taxes have to be spread evenly
throughout the states Federal gov’t can’t tax state gov’ts
Tax - money citizens pay to fund the gov’t for the public good
LIMITS: Can only be used for public use Can’t tax exports Direct taxes have to be spread evenly
throughout the states Federal gov’t can’t tax state gov’ts
Direct tax - a tax paid straight to the gov’t Indirect tax - a tax paid to a company who
pays it to the gov’t
---------- Progressive tax - the more money you make,
the more taxes you pay Flat tax - everyone pays the same tax rate
Direct tax - a tax paid straight to the gov’t Indirect tax - a tax paid to a company who
pays it to the gov’t
---------- Progressive tax - the more money you make,
the more taxes you pay Flat tax - everyone pays the same tax rate
Income TaxIncome Tax
A tax based on how much money you make a year
Paid to the IRS Most people have it taken out of their
paychecks every month
A tax based on how much money you make a year
Paid to the IRS Most people have it taken out of their
paychecks every month
Payroll TaxPayroll Tax
Taxes that employers are required to take out of your paycheck every month For social security, Medicare, etc.
Taxes that employers are required to take out of your paycheck every month For social security, Medicare, etc.
Other Types of TaxesOther Types of Taxes
Excise tax - a tax on the production and selling of goods (ex: oil, gasoline, alcohol, tobacco, etc.)
Gift tax - taxes paid on gifts or prize winnings
Estate tax - taxes on the belongings of someone who has died
Excise tax - a tax on the production and selling of goods (ex: oil, gasoline, alcohol, tobacco, etc.)
Gift tax - taxes paid on gifts or prize winnings
Estate tax - taxes on the belongings of someone who has died
Stupid Things the Gov’t Wastes Our Tax Money On (2012)Stupid Things the Gov’t Wastes Our Tax Money On (2012) Military beef jerky: $700,000 Robot squirrel built to see how a snake would react to
it: $325,000 Research for best astronaut food on Mars: $1 million Research to help golfers putt better using their
imagination to envision a bigger hole: $350,000
Moroccan pottery classes: $27 million Making pennies (costs 2 cents per penny): $70 million Free Gov’t cell phones: $1.5 billion Helping Russia hire Russians to make Russian
Weapons: $15 million
Military beef jerky: $700,000 Robot squirrel built to see how a snake would react to
it: $325,000 Research for best astronaut food on Mars: $1 million Research to help golfers putt better using their
imagination to envision a bigger hole: $350,000
Moroccan pottery classes: $27 million Making pennies (costs 2 cents per penny): $70 million Free Gov’t cell phones: $1.5 billion Helping Russia hire Russians to make Russian
Weapons: $15 million
“Prom Week” - a videodeveloped by the gov’t to reliveyour prom night: $516,000
Talking Urinal disks: $10,000
More Stupid Spending…More Stupid Spending…
A musical about global warming: $697,177 Refunds for tax fraud criminals: $3.9 billion Athletes’ overseas vacations: $5.5 million Research on fruit flies: $939,771 Research on what it means to be happy:
$24,995 Research asking if old people should play
World of Warcraft: $1.2 million
A musical about global warming: $697,177 Refunds for tax fraud criminals: $3.9 billion Athletes’ overseas vacations: $5.5 million Research on fruit flies: $939,771 Research on what it means to be happy:
$24,995 Research asking if old people should play
World of Warcraft: $1.2 million
Daily Spending SnapshotDaily Spending Snapshot
Dept. of Health and Human Services: $3 billion a day
Social Security: $2.5 billion a day Dept. of Defense: $1.8 billion a day
Dept. of Health and Human Services: $3 billion a day
Social Security: $2.5 billion a day Dept. of Defense: $1.8 billion a day
Government BorrowingGovernment Borrowing
Surplus - spending LESS money than what you earn (ex: you make $100 but only spend $10 of it)
Deficit - spending MORE money than what you earn (ex: you make $100 and spend $10,000 of it)
Interest - an extra charge for extra time to pay off a debt
Surplus - spending LESS money than what you earn (ex: you make $100 but only spend $10 of it)
Deficit - spending MORE money than what you earn (ex: you make $100 and spend $10,000 of it)
Interest - an extra charge for extra time to pay off a debt
Deficit Financing - spending all the money you make, then borrowing the rest
Public debt - all the money the gov’t owes
(current public debt: $17.1 trillion)
- the U.S. borrows 46 cents per dollar spent- The federal gov’t borrows $40,000 a second
Deficit Financing - spending all the money you make, then borrowing the rest
Public debt - all the money the gov’t owes
(current public debt: $17.1 trillion)
- the U.S. borrows 46 cents per dollar spent- The federal gov’t borrows $40,000 a second
Gov’t SpendingGov’t Spending
Entitlements - benefits the gov’t must give to the people who qualify for them
Ex: Medicare, Social
Security, welfare/food stamps, etc.
about 80% of gov’t
spending is uncontrollable
Entitlements - benefits the gov’t must give to the people who qualify for them
Ex: Medicare, Social
Security, welfare/food stamps, etc.
about 80% of gov’t
spending is uncontrollable
The Federal BudgetThe Federal Budget
Budget - a plan for how you will spend your $
Fiscal Year - the year during which the federal budget will be spent (fiscal = finance, money)
The President and Congress work together to come up with the federal budget every year
Budget - a plan for how you will spend your $
Fiscal Year - the year during which the federal budget will be spent (fiscal = finance, money)
The President and Congress work together to come up with the federal budget every year
Budget ProcessBudget Process
NO MONEY can be spent in gov’t unless Congress makes a law about it
Process: 1.) The President (with help from his EOP)
comes up with a plan for a budget 2.) He proposes his budget to Congress 3.) Budget goes to committees in Congress 4.) Budget made into bills to be passed by
House and Senate
NO MONEY can be spent in gov’t unless Congress makes a law about it
Process: 1.) The President (with help from his EOP)
comes up with a plan for a budget 2.) He proposes his budget to Congress 3.) Budget goes to committees in Congress 4.) Budget made into bills to be passed by
House and Senate
BUDGET HELP!BUDGET HELP!
The federal gov’t has entrusted your group with $10,000,000,000 to spend for the country. How much money would you spend per executive department? Why?
Is there a way your group can make these programs more efficient to cut down our national debt?
The federal gov’t has entrusted your group with $10,000,000,000 to spend for the country. How much money would you spend per executive department? Why?
Is there a way your group can make these programs more efficient to cut down our national debt?
Taxes Excise tax Payroll tax Income tax Gift tax
Taxes Excise tax Payroll tax Income tax Gift tax
Estate tax Surplus Deficit Deficit financing interest
Estate tax Surplus Deficit Deficit financing interest
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