1. Government Expenses -Government Services Schools, fire, social security, etc. -Government Employees -Revenue Sources 60% to 80% come from taxes How the gov. gets money

2. Politics of Taxation -all citizens of all governments pay taxes Want to tax enough to pay for services but not so much that you lose elections -how much is enough??? -citizen revolts Possible if taxed too much

3. Taxation Limits -all tax bills must begin in House of Representatives “Power of the purse” -uniformity of taxes Must appear even -can’t tax interstate trade or exports Slave Trade Compromise CAN tax imports (tariff)

4. Taxation Principles -Adam Smith Wealth of Nations Explained how capitalist gov. should run -Based on Ability to Pay -Progressive Tax-- Tax that is based on the ability of a person to pay and people who make more money pay a greater percentage Income tax -Regressive Tax-- Tax that is paid on an equal percentage by everyone---can be unfair to those with less of a disposable income Sales taxes

5. Income Taxes -Personal Income Tax Progressive, what is taken out of your paycheck -Provides most of Federal Revenue -Taxes based on Taxable Income Exemptions What you don’t have to pay Deductions Get $ back for things Tax Returns What you send to fed. Gov. to prove you paid

6. Property Taxes -Property Tax Taxes paid on homes, cars, motorcycles, etc. -Primary revenue for local governments Provides $ for schools in NC -Based on estimated value Not actual value -Stable source of revenue

7. Sales Taxes -Sales Tax On items bought in state -Most sales taxes go to state government -Easy to collect Any purchase = gov. revenue -Sales Taxes are Regressive -Excise taxes-- Tax that is placed upon certain items such as gas, alcohol, and cigarettes

8. Other Taxes -Estate Taxes The money left behind to heirs of wealthy people -Gift Taxes Taxes on bonuses and winnings (40% or more) -Tariffs or Custom Duties Tax on imported goods (protect American products)

9. Non-Tax Revenue -Intergovernmental Revenue Money given from federal to state, state to local -Selling Excess Land or Property -Tolls -Fines Parking/speeding tickets, probation fines -Fees, Licenses, Disposal, Permits -Lotteries