1. How the Government Raises Money
Paying For Government
How the Government Raises Money

2. The High Cost of Government
Costs an enormous amount of money to run the government
Large population that continues to grow
Cost of living increases (same amount of money does not buy as much as it used to)
Government provides more programs/services than it did in the past
Largest expenses of the federal government are benefit programs and national defense (especially after 9/11 attacks)
Another reason for high cost of government is debt
Government has spent more money than its raised
Must pay interest on the debt (amount charged for borrowing the money)
National debt- interest + total amount of money the U.S. government has borrowed

3. Establishing Priorities
Most of the money the government raises comes from taxes
We should expect the government to spend our tax dollars wisely, regardless if we agree with the taxes or not
What programs need the most money or will bring the most benefits to the people?
Government must decide which activities need funding in order of their urgency and need
Programs with highest priority get funded first
There has always been debate over which government programs/services should get top priority

4. The Purpose of Taxes
Chief purpose of taxes is to raise money for the government
This money pays the cost of running the government
Taxes pay for our schools, hospitals, police and fire forces, infrastructure, national defense, social security, and other necessary programs/services for the elderly, disabled, and poor
In other words, WE NEED TAXES TO SUSTAIN OUR COUNTRY

5. Rules of Taxation Ability to Pay Equal Application
Taxes are set at different rates to make it possible for citizens to pay
A lot of tax rates depend on your income (the more money you make, the more you are taxed and vice versa)
Equal Application
Some taxes are applied at the same rate
Sales taxes at the grocery store or excise taxes on alcohol and tobacco are the same for everyone purchasing those goods

6. Rules of Taxation Scheduled Payment
Taxes should be paid on a set schedule
Employers withhold a portion of taxes from workers’ paychecks or if you’re self- employed, you must set aside a necessary amount of taxes to send to the government
Government collects taxes in mid April every year (“tax season”)

7. Other Methods for Raising Money
Fees, fines, and payments for special services
Fees are small payments charged for various licenses
Hunting, marriage, drivers, entrance to national parks etc. etc.
Government collects billions of dollars in fees each years

8. Other Methods for Raising Money
Fines represent money charged for breaking certain laws
Speeding, traffic violations, fishing without a license, etc. etc.
Some special services are paid for directly by the people who use them
Toll roads, parking meters

9. Government Borrowing
More often than not, government must borrow money to meet expenses
Large projects like building bridges and schools cost more money than most state or local governments can pay for directly
Governments can borrow money from citizens by issuing bonds- certificates stating the government has borrowed a certain amount of money from an individual
Promises to repay that loan after a certain date as well as repay the interest
Bonds allow governments to raise money for public projects while giving individual investors an opportunity to make a profit

10. ?
What are three main reasons why it costs so much to run the government?
Why do we need taxes?
When it comes to taxes, what is the debate over establishing priorities?
What is the difference between fees and fines?
What are government bonds?