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64 terms

Taxes and Spending

STUDY
PLAY
audit
when the IRS checks tax returns more closely to be sure they are accurate
budget
a plan of income and outcome
customs duties
taxes levied on goods imported into the US; also known as tariffs
deficit spending
when the government spends money it does not have
dependent
a person who relies on someone else for support . A taxpayer may claim an exemption for a dependent if certain conditions are met
direct benefit payment
government spending programs including Social Security , social welfare programs , and health care programs
discretionary spending
all other forms of government spending that does not include direct benefit payments, interest on the national debt, or national defense
excise taxes
Taxes on the sale or use of specific products or transactions
exemptions
Amount that taxpayers can claim for themselves, their spouses , and eligible dependents
federal debt
the amount of money the government owes at any one given time
Federal Reserve System
also known as the Fed, it is the central banking system of the US (banker's bank)
General Accounting Office
It is the government agency that reviews the financial management of government programs that Congress creates, collects government debts, settles claims, and provides legal service
Grants in Aid
Sums of money given to the states by the federal government for a variety of specific purposes
Gross National Product
the sum of all goods and services produced in a nation in a year
Income tax
Taxes on income, both earned (salaries, wages, tips, commissions) and unearned (interest and dividends)
Incrementalism
the term used to explain that the total budget changes little from year to year
Internal Revenue Service
Government agency which manages the payment of taxes
Medicaid
Government social benefit program which helps the poor with medical expenses
Medicare
Government social benefit programs which helps the elderly with medical expenses
Office of Management and Budget
prepares the national budget that the president proposes to Congress each year
progressive tax
a tax that takes a larger percentage of income from high income groups than from low income groups
protective tariff
a tax on imported goods designed to make domestic industry more competitive
regressive tax
a tax that takes a larger percentage of income from lower income groups than from high income groups
securities
financial instruments, including bonds, notes, and certificates, that are sold as a means of borrowing money with a promise to repay the buyer with interest after a specific time period
social insurance taxes
the money collected by the federal government to pay for major social programs, such as social security, medicare, and unemployment compensation programs
social security
money contributed by employers and employees which will later serve as a retirement for the wage owner
tax
the money that people and businesses pay to support the activities of the government
tax credits
amounts that can be deducted directly from taxes owed. These amount result in a dollar to dollar reduction in taxes owed
tax loopholes
an exploitation of a tax law which can reduce or eliminate the tax liabilites of the filer.
taxable income
the total income of an individual minus certain deductions and exemptions
total income
the sum of every source of taxable income that you have regardless of where it came from, and before any deduction, exemptions, or adjustments are applied. Any income you can think of!
uncontrollable expenditures
government expenditure required by law or resulting from previous budgetary commitements
withholding
the money an employer withholds from workers' wages as payment of anticipated income tax
IRS
Collects taxes from individual citizens and businesses
IRS
Reviews tax returns to ensure accuracy
IRS
Publishes paper and electronic tax forms
IRS
The forerunner of this agency was created by President Abe Lincoln after implementation of the nation's first income tax during the Civil War
OMB
Largest office within the Executive Office of the President
OMB
Helps set funding priorities which coincide with the president's agenda
OMB
Works with the president in formulation of federal budget
OMB
Receives spending plans from all federal agencies and reviews them with the president and his Council of Economic Advisors
OMB
Helps negotiate budget cuts with heads of federal agencies
OMB
Submits final budget to president for final review and approval. This is sent to Congress for official approval
CEA
Assesses the nation's economic status
CEA
Predicts future economic conditions
CEA
Helps propose solutions to specific economic problems, such as unemployment and inflation
CEA
prepares an annual report that the president gives to Congress on the state of the economy
CBO
Coordinates the budget work of Congress
CBO
Studies the budget proposals sent by the president
CBO
Projects the costs of the proposed budget
GAO
It is the audit, evaluative, and investigative arm of Congress
GAO
It serves as a 'watchdog' over how funds that Congress appropriates are spend
GAO
Reviews financial management of all government programs that Congress creates, collects government debt, settles claims, and provides legal services.
GAO
Issues an audit report of the financial statement of the US Governement called the Financial Report of the US Government
GAO
Publishes a Federal Fiscal Outlook Report as a way to advocate for financial sustainability and to reduce the federal
Fed
it is the central banking system of the US
Fed
It is where banks borrow money from (banker's bank)
Fed
Determine the general money and credit policies of the US
Fed
Raise or lower discount rates
Fed
Raise or lower the serve requirement for member banks (the minimum amount of money that must be kept in their vaults)
Fed
Puts money into the economy by buying government bonds on the open market
SEC
regulates the trading of securities (stocks and bonds)
SEC
Aimed at preventing corporate abuse
SEC
Is in charge of enforcing seven major laws that govern the securities indusry