1. Chapter 12 PayING FOR GOVERNMENT
PGS. 289 FL

2. Essential QUESTION: What are the different types of taxes In America?
Chapter 12 Section 1 Raising Money PGS
Essential QUESTION: What are the different types of taxes In America?

3. In 2010, the federal government spent 3.5 Trillion Dollars
The High Cost of Government (pgs )
The bigger the population, the more it cost government to provide all of their services
The Federal Budget (pg.295)
In 2010, the federal government spent 3.5 Trillion Dollars
43% or about 1.5 Trillion of that was spent Social Security, Medicare, and Medicaid
Those are government programs design to help the elderly, disabled, and poor
The government also spends on defense and military
Post 9/11 require a large increase in defense and military spending
The American Government has debt from spending more than it raised over the years
The American Government borrows money to make up it difference in debt
Interest has to be on the money the American Government borrows
Interest: payment for the use of loaned money
The National Debt is American’s Government total amount of money borrow plus it’s interest
National Debt: the total amount of money owed by the U.S. Government plus the interest that must be paid on this borrowed money
What are the main expenses of the federal government?

4. The Tax System (pg )
At all levels of government paying taxes is mandatory for citizens and businesses
This allows governments to plan their future budgets
Establishing Priorities (pg.296)
Government officials must prioritize what the programs will receive funding first and the most to which ones will receive funding last and the fewest
Purposes of Taxation (pg.296)
The primary goal of taxing is to raise money, a.k.a. revenue
Revenue: income
All levels of government depend upon revenue to provide their citizens, businesses, and economy beneficial good and services
Taxes also help control some activities
Governments tax imported goods to help local citizens and businesses
Governments tax items like cigarettes, alcohol, etc. to discourage destructive behavior

5. The Tax System (pg )
The government tries to follow certain rules or principles when creating their tax system
Ability to Pay (pg.297)
People with different income levels pay a different percentage of income tax
People with very low income levels do not pay
Equal Application (pg.297)
Similar items are tax the same rate
Scheduled Payment (pg.297)
Tax are paid on a set, established schedule to help steadily fund the government throughout each calendar year
Late payments are charged interest and penalty fees

6. Other Ways to Pay for Government (pg.297-298)
Governments can raise and lower taxes, fees and fines, and borrow money to cover their expenses
Fees and Fines (pg.297)
Governments raises billions of dollars each year through fees
Fees: government charges for a service or license
Governments also increases revenue through fines
Fine: money paid as a penalty for breaking certain laws
Governments also creates revenues by providing services
Government Borrowing (pg.298)
Governments borrow money when they need more to meet their expenses
Governments borrow money by issuing bonds
Bond: a certificate of debt issued by governments and corporations to persons from whom they have borrowed money
Businesses and people purchase these government bonds with agreement that the government will pay them back by a certain date plus the agreed upon interest