Raising Money Social Studies I Mrs. Hunt

Learning Target I will identify the necessities of raising money for the government.

I. Cost of Government A.The Federal Budget 1.Created by each level to determine revenues and expenditures. 2.Largest cost to the federal government is the benefit payment to the elderly, disabled or living in poverty. 3.Defense spending has risen since 9/11

I. Cost of Government A.The Federal Budget 3.Debt A.The American government has spent more than it has made, therefore it has borrowed money. A.Interest – payment made for the borrowed money. B.Interest + total amount of money borrowed = National Debt

II. Tax System A.Establishing Priorities 1.Federal, State and local governments all collect taxes. 2.Government officials must determine what programs need the most money

II. Tax System A.Purposes of Taxation 1.Primary purpose is to raise revenue. 2.Regulate imports as well as business activity in the US. A.Tariff B.Excise tax

III. Principles of Taxation A.Ability to Pay 1.Higher for those with higher incomes, and lower for those with lower incomes. A. Income tax

III. Principles of Taxation B.Equal Application 1.Taxes are applied at a similar tax rate for similar items. A. Sales Tax

III. Principles of Taxation C.Scheduled Payment 1.Taxes are taken out of pay check on a regular schedule. 2.Taxes are filed at the end of the year.

IV. Other Revenue A.Fines and Fees 1.Fees A. Payments charged by governments for various licenses. 2.Fine A. Money charged as a penalty for breaking certain laws.

V. Government Borrowing A.Bond 1.A certificate stating that the government has borrowed money from the owner of the bond 2.The government promises to repay the loan on a certain date plus interest. 3.Usually bonds are sold for public projects.