Chapter 12 Notes Paying for Government

Raising Money I. Government is Expensive

Raising Money I. Government is Expensive We have 300 million people, some of whom want something

Raising Money I. Government is Expensive We have 300 million people, some of whom want something 2005 spending was 2.5 trillion

Raising Money I. Government is Expensive We have 300 million people, some of whom want something 2005 spending was 2.5 trillion Defense is 19 percent Social Security is one third

Raising Money I. Government is Expensive We have 300 million people, some of whom want something 2005 spending was 2.5 trillion Defense is 19 percent Social Security is one third Debt (spending more than we take in)

Raising Money I. Government is Expensive We have 300 million people, some of whom want something 2005 spending was 2.5 trillion Defense is 19 percent Social Security is one third Debt (spending more than we take in) –Interest; money paid on borrowed money

Raising Money I. Government is Expensive We have 300 million people, some of whom want something 2005 spending was 2.5 trillion Defense is 19 percent Social Security is one third Debt (spending more than we take in) –Interest; money paid on borrowed money National Debt = Money borrowed + Interest

II. Taking our Money

–Compulsory taxes (federal, state, local)

II. Taking our Money –Compulsory taxes (federal, state, local) –everyone pays, businesses & people

II. Taking our Money –Compulsory taxes (federal, state, local) –everyone pays, businesses & people a. Establishing Priorities

II. Taking our Money –Compulsory taxes (federal, state, local) –everyone pays, businesses & people a. Establishing Priorities Differing view

II. Taking our Money –Compulsory taxes (federal, state, local) –everyone pays, businesses & people a. Establishing Priorities Differing view –taxes too high, not enough services provided

II. Taking our Money –Compulsory taxes (federal, state, local) –everyone pays, businesses & people a. Establishing Priorities Differing view –taxes too high, not enough services provided –Which programs need money, which should be cut?

b. Principles of Taxation

–Ability to pay; taxes on income are lower for lower incomes

b. Principles of Taxation –Ability to pay; taxes on income are lower for lower incomes –Equal Application; taxes should be applied at the same rate for similar taxable items

b. Principles of Taxation –Ability to pay; taxes on income are lower for lower incomes –Equal Application; taxes should be applied at the same rate for similar taxable items sales tax

b. Principles of Taxation –Ability to pay; taxes on income are lower for lower incomes –Equal Application; taxes should be applied at the same rate for similar taxable items sales tax –Scheduled payment; taxes taken out of pay on a regular schedule

b. Principles of Taxation –Ability to pay; taxes on income are lower for lower incomes –Equal Application; taxes should be applied at the same rate for similar taxable items sales tax –Scheduled payment; taxes taken out of pay on a regular schedule paying in a lump sum not practical

c. Purposes of taxation

–To raise money…lots of it

c. Purposes of taxation –To raise money…lots of it –Pays to run government

c. Purposes of taxation –To raise money…lots of it –Pays to run government –To regulate or to control

c. Purposes of taxation –To raise money…lots of it –Pays to run government –To regulate or to control Gas tax - decrease usage Sin tax - cigarette or alcohol tax

III. Other ways the government has of getting money from us

–Fees - payments charged by governments for various licenses

III. Other ways the government has of getting money from us –Fees - payments charged by governments for various licenses Garbage fees (city of Buffalo) Drivers licenses, auto registration

III. Other ways the government has of getting money from us –Fees - payments charged by governments for various licenses Garbage fees (city of Buffalo) Drivers licenses, auto registration –Fines - fees for breaking the law

III. Other ways the government has of getting money from us –Fees - payments charged by governments for various licenses Garbage fees (city of Buffalo) Drivers licenses, auto registration –Fines - fees for breaking the law illegal parking, speeding Violating pollution laws

Bonds - Government borrowing at a global level

–issue a bond, or a promise to pay money back at a certain interest

Bonds - Government borrowing at a global level –issue a bond, or a promise to pay money back at a certain interest Savings Bonds Treasury Notes Treasury Bonds

The End