How a Bill Becomes a Law

1. How a Bill Becomes a Law Play “The making of a Law”- 20 minutes

3. Page 344

4. Taxes “What we pay for civilized society” Oliver Wendell Holmes

5. Power to Tax • Expressed constitutional limitations • Taxes may be levied only for public purposes • Export taxes are prohibited • Direct taxes must be equally apportioned among the states according to their populations • Indirect taxes must be levied at the same rate throughout the country.

6. Power to Tax • Implied limitation on the power to tax State and local governments • The Federal Government • may not tax State or local governments in the exercise of their governmental duties • Federal can’t tax State’s for revenue made through • Vehicle registration • Property taxes • may tax nongovernmental State and local activities • tax on State-sold liquor

7. Progressive Taxes • Progressive- tax levied according to level of income • Income taxes- tax levied on the individuals salary or wages (income) • Income Tax brackets in U.S. • $0 - 7,550 10% • $7,550 - 30,650 15% • $30,650 - 74,200 25% • $74,200 - 154,800 28% • $154,800 - 336,550 33% • $Above 336,550 35%

8. Bush tax cuts

10. Regressive Taxes • Regressive- tax levied at a flat rate • Social security- 6.2% on earnings up to $94,200 • A person who makes $30,000 a year pays $1,860 (30,000*.062) in tax or 6.2% of wagesb. A person who makes $200,000 a year pays $6,045 (97,500*.062) in tax or 3% of wagesc. A person who makes $500,000 a year still pays $6,045 in tax (97,500*.062) or 1.2% of wages • Lower incomes families hit harder

11. Federal Budget

12. How is the federal budget created? “No money shall be drawn from the treasury, but in consequence of appropriations made by law” Article I sec. 9

13. Two Types of spending • Controllable spending (Discretionary) • Congress and the President decide how much will be spent each year • Appropriations- assigning to particular use • Military equipment • Environmental protection

15. Uncontrollable Spending • Uncontrollable spending- 80% of spending • Mandatory uncontrollable spending • Interest on public debt • Entitlements- Benefits that must be paid to all those who meet the eligibility requirements • Social security • Medicare • Medicaid • Food stamps • Unemployment insurance