Taxing and Spending Chapter 20
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Created by:
hangon_squared729 on April 1, 2012
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American Gov.
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20 terms
Terms | Definitions |
|---|---|
 (What is a) tax | The amount of money that the government collects from its citizens to help it perform its duties. Usually a % determined by the gov. |
| Why do we have to pay taxes | It is the law So gov. has the money it needs to fufill its duties and responsibilities 44% of gov. revenue comes from collected income taxes. |
| NO | Does everyone pay the same amount of taxes? |
| Progressive income tax | The more money a person earns the larger % is taken by the gov. |
| How much should Americans have to pay? | Depends on philosphy of political party, and which gov. is in power. Big gov. vs. small gov. |
| How does gov. spend the money | Pays interest on national debt 11% Direct benefit payments 49% national defense 21% Discretionary spending 19% |
| National debt | The amount of money that the gov. owes at any one time. |
| Direct benefit payments | Social Security payments Social welfare programs food stamps AFDC, WIC health care programs |
| National defense | Changes with ever changing political party landscape of the presidency and Congress different priorities of the two major parties. |
| Discretionary spending | All of the other areas of gov. spending in which benefit states and local communities the environment, transportation, and criminal justice grants to states and local communities for road repair, public housing, police training, school lunch programs etc. |
| Different types of taxing | Individual income 48% Corporate income 10% Social Insurance 34% Excise tax 4% Customs Duties 2% Estate and Gift 2% |
| Taxable income | A percentage of a person's taxable income = total income-(deductions+exemptions) |
| Exemptions | An allowance of income that is not figured into taxable income and is determined by the # of people who are dependent upon the wage earner for food, clothing, and shelter |
| Deductions | A part of a person's total expenditures which meet certain criteria and therefore are not taxable and not counted toward the taxable income figure. EX. Donations to charity student loans educator expenses $ put in IRA child care expenses taking courses adoption expenses |
| witholding | $ taken out of every paycheck for tax purposes. Prevents people from having to pay one large sum at the end of the year |
| Corporate income Tax (10%) | It is like an individual income tax, except it is based on the total taxable income of a company, rather than an individual wage earner. |
| Social Insurance Tax (34%) | Social Security, Medicare, unemployment compensations. |
| Excise Tax (4%) | Taxes on the manufacture, sale, transportation, or consumption, of goods and performance of services |
| Customs Duties (2%) | Taxes on goods imported into the U.S. also known as a tariff or protective tariff |
| Estate/ Gift Tax (2%) | Taxes on assets (property or money) of a person who dies. Taxes on gifts given by a living person of more than 10,000-prevents people from evading the 'estate tax' exceptions are made with gifts given to family members. |
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