Taxing and Spending Chapter 20
|(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
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
$ put in IRA
child care 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.