Taxation in the United States

1. Taxation in the United States Goal 9 Notes

2. Government Financing, Taxes, And Spending • Each year the federal and state governments make and pass budgets. A budget is a plan for spending for the government for that year. • If the government spends more than it takes in then it is in a deficit. If the government can bring in more than it spends then it has a surplus.

3. Federal Revenues • There are 2 main sources of government revenue

4. Income Taxes • a tax on the income of the people, this makes up nearly half of the federal governments revenue. The IRS is responsible for collecting income taxes. The deadline to file income taxes is April 15th.

5. Payroll Taxes • this is money that is taken out of your pay checks to fund Social Security, and Medicare, this makes up one-third of federal revenue.

6. Federal Expenditures • Social Security • National Defense • Medicare and Medicaid • The greatest expenditures of the federal government

7. State Revenues • - The main sources of state income are: • intergovernmental revenues, • property taxes, • sales taxes, • and income tax

8. State Expenditures • The main sources of spending at the local level are: • Higher education, • K-12 education, • welfare, police, fire • hospitals, • and highways

9. Types of Taxes • Progressive Taxes- are taxes that increase when you have a higher income. Example: income taxes. • Regressive Taxes- are taxes that remain the same regardless of how much money you make, examples are, sales tax, and property taxes.

10. Types Continued……. • Excise Tax – A tax on a specific Item • Property Tax – A tax on your land or other property. • Income Tax – A tax on your earned income.

11. Credit and Savings • Credit- Banks give credit to people who are not risks. Today, credit cards are not hard to get. You should be careful not to get in too deep. You might get stuck paying high interest and end up paying almost triple what you would have paid if you would have paid with cash. • Savings Accounts- and checking accounts are the bset way to save your money, banks give you interest so you will keep your money with them. They are safe and easy to use, you can withdraw your money, write a check, or use bank debit cards. • Money market and CD’s- These are accounts that yield a higher return for your money.

12. International Interdependence • Interdependence- means that everything is related in some form or another. Every country depends on the other for survival. We need trading partners so our businesses will be able to survive. If the US was the only economic power in the world, our standard of living would be lower. This is why we give aid to poor countries to try to build their economies to help support us.

13. Tariffs • are taxes on imported goods, we do this to protect American Companies from foreign competition, and to make some money • Protective Tariffs • Revenue generating Tariffs.

14. Quotas • Are limits on imports

15. NAFTA • North American Free Trade Agreement • This agreement between Canada, Mexico and the US eliminated all tariffs between these three nations.

16. FED • Federal Reserve System • The national bank of the US. • Divided into 12 regions. • They conduct the banking or the US.