Government Spending

1. Government Spending & Taxation

2. Taxation

3. Why Taxes?

5. Government Expenses Mandatory Entitlements Interest on Debt Operating Budget Discretionary should we or shouldn't we?

6. Why so much Political Debate? • Discretionary spending – should we or shouldn't we? • Capital budget – major projects • Defense, Education • Tax incentives to encourage certain behaviors – tax credits or exemptions Shouldn’t we work towards a balanced budget?

7. Tax Base Areas subject to taxation • Income (city, state, federal) • Sales (state) • Property (local) • Corporate income tax (business profits)

8. Tax Structures • Progressive - percentage increases as income increases – income tax (income tax brackets) • Proportional – flat tax – same percentage regardless of income (property tax) • Regressive – smaller percentage of income is taken in taxes as income increases – (sales tax)

10. Income Tax Progressive Structure 16th Amendment: The Congress shall have power to lay and collect taxes on incomes, from whatever source derived, without apportionment among the several States, and without regard to any census or enumeration.

11. Federal Taxes • Why is there money taken out of my check? W4 – withholdings • How much of my salary is taxed? W2 – taxable income • Doesn’t the government realize that I need my salary to live? -Personal exemption • What about other expenses too, like work related uniform costs, or education? – deductions • How much in total do I have to pay the government? Tax schedule - Brackets • What if I have paid them too much- 1040ez - tax return (refund?)

13. 2013: $3,900

14. Personal Exemption Individuals are entitled to claim a personal exemption for themselves and any dependents they support. 2013: $3,9002012: $3,8002011: $3,7002010: $3,6502009: $3,6502008: $3,500

15. Deductions