1. A merican C ivicsHOLT HOLT, RINEHART AND WINSTON1 Chapter 12 Paying for Government Section 1:Raising Money Section 2:Types of Taxes Section 3:Managing the Countrys Money

2. A merican C ivicsHOLT HOLT, RINEHART AND WINSTON2 Chapter 12 OBJECTIVES Why is the cost of government high? Why is the cost of government high? How do government officials decide how to spend the governments money? How do government officials decide how to spend the governments money? What guidelines do governments use when taxing citizens? What guidelines do governments use when taxing citizens? Section 1:Raising Money

3. A merican C ivicsHOLT HOLT, RINEHART AND WINSTON3 Chapter 12 The cost of government is high due to: A population of more than 281 million people A population of more than 281 million people The rising cost of living The rising cost of living More government programs and services like defense spending and payments to the elderly, disabled, or impoverished More government programs and services like defense spending and payments to the elderly, disabled, or impoverished The national debt The national debt Section 1:Raising Money

4. A merican C ivicsHOLT HOLT, RINEHART AND WINSTON4 Chapter 12 Deciding how to spend the governments money: Officials establish governments priorities. Officials establish governments priorities. Priority is given based on urgency and need. Priority is given based on urgency and need. Debate over the countrys priorities is common. Debate over the countrys priorities is common. Section 1:Raising Money

5. A merican C ivicsHOLT HOLT, RINEHART AND WINSTON5 Chapter 12 Tax guidelines: Ability to paybased on earned incomes; poor do not pay income tax Ability to paybased on earned incomes; poor do not pay income tax Equal applicationtax applied at the same rate for similar taxable items Equal applicationtax applied at the same rate for similar taxable items Scheduled paymenttaxes due by April 15 Scheduled paymenttaxes due by April 15 Fees, fines, and payments for special services also raise government funds. Fees, fines, and payments for special services also raise government funds. Section 1:Raising Money

6. A merican C ivicsHOLT HOLT, RINEHART AND WINSTON6 Chapter 12 OBJECTIVES What are the different types of taxes? What are the different types of taxes? What is the difference between progressive and regressive taxes? What is the difference between progressive and regressive taxes? What are tariffs, and how can they be used to help the U.S. economy? What are tariffs, and how can they be used to help the U.S. economy? Section 2:Types of Taxes

7. A merican C ivicsHOLT HOLT, RINEHART AND WINSTON7 Chapter 12 Different types of taxes: Individual income taxthe largest source of tax revenue; most citizens pay federal, state, and local income taxes Individual income taxthe largest source of tax revenue; most citizens pay federal, state, and local income taxes Sales and excise taxsales taxes are collected by state or local governments; excise taxes (on luxury items) are collected by the federal government Sales and excise taxsales taxes are collected by state or local governments; excise taxes (on luxury items) are collected by the federal government Property taxeschief income for most local governments; funds public education Property taxeschief income for most local governments; funds public education Section 2:Types of Taxes

8. A merican C ivicsHOLT HOLT, RINEHART AND WINSTON8 Chapter 12 Different types of taxes: (continued) Estate, inheritance, and gift taxestates of the deceased, value of inheritances, and monetary gifts above $10,000 are taxable by the federal government Estate, inheritance, and gift taxestates of the deceased, value of inheritances, and monetary gifts above $10,000 are taxable by the federal government Import taxtariffs on imported products used to regulate trade Import taxtariffs on imported products used to regulate trade Section 2:Types of Taxes

9. A merican C ivicsHOLT HOLT, RINEHART AND WINSTON9 Chapter 12 Progressive and Regressive Taxes Progressive taxes take a larger percentage of income from high-income groups. Example: individual income tax Progressive taxes take a larger percentage of income from high-income groups. Example: individual income tax Regressive taxes take a larger percentage of income from low-income groups. Example: sales taxes Regressive taxes take a larger percentage of income from low-income groups. Example: sales taxes Section 2:Types of Taxes

10. A merican C ivicsHOLT HOLT, RINEHART AND WINSTON10 Chapter 12 Tariffs and the U.S. Economy Tariffs are taxes placed on goods imported from foreign countries. Tariffs are taxes placed on goods imported from foreign countries. Tariffs can help the U.S. economy by: Tariffs can help the U.S. economy by: Regulating trade Regulating trade Retaliating against tariffs placed by foreign countries on U.S. goods Retaliating against tariffs placed by foreign countries on U.S. goods Protecting American industries against foreign competition Protecting American industries against foreign competition Raising prices on foreign goods Raising prices on foreign goods Section 2:Types of Taxes

11. A merican C ivicsHOLT HOLT, RINEHART AND WINSTON11 Chapter 12 OBJECTIVES How do governments collect public money? How do governments collect public money? What steps are involved in creating the federal budget? What steps are involved in creating the federal budget? How large is the national debt, and why? How large is the national debt, and why? Section 3:Managing the Countrys Money

12. A merican C ivicsHOLT HOLT, RINEHART AND WINSTON12 Chapter 12 How governments collect public money: Internal Revenue Servicecollects federal taxes Internal Revenue Servicecollects federal taxes U.S. Customs Servicecollects taxes on imported goods U.S. Customs Servicecollects taxes on imported goods State and local governments collect taxes through their own collection agencies. State and local governments collect taxes through their own collection agencies. Section 3:Managing the Countrys Money

13. A merican C ivicsHOLT HOLT, RINEHART AND WINSTON13 Chapter 12 Steps in creating the federal budget: Office of Management and Budget and the president prepare the budget. Office of Management and Budget and the president prepare the budget. The prepared budget is published and sent to Congress for study. The prepared budget is published and sent to Congress for study. Congress debates the budget and makes changes. Congress debates the budget and makes changes. Both houses must approve the budget. Both houses must approve the budget. The budget is passed with 13 appropriations bills. The budget is passed with 13 appropriations bills. Bills are sent to the president for approval or veto. Bills are sent to the president for approval or veto. Section 3:Managing the Countrys Money

14. A merican C ivicsHOLT HOLT, RINEHART AND WINSTON14 Chapter 12 The National Debt 1970–1997The government spent more than it collected. 1970–1997The government spent more than it collected. Money was borrowed to make up the difference. Money was borrowed to make up the difference. Interest on the borrowed money increases the debt. Interest on the borrowed money increases the debt. Government bonds used to borrow money are being bought by foreign investors. Government bonds used to borrow money are being bought by foreign investors. Clinton plan for balanced budget in 2002 was thwarted by recession and terrorism. Clinton plan for balanced budget in 2002 was thwarted by recession and terrorism. Section 3:Managing the Countrys Money