1. Where does this money come from?
The Government Spends
$ 3-4 TRILLION!
Where does this money come from?

2. The Power to Tax
Congress exercises the taxing power to finance the costs of operating the Federal Government as well as for non-revenue purposes!

3. Constitutional Limitations:
Taxes may be levied only for public purposes
Export Taxes are prohibited
Direct taxes are to be equally apportioned based on a state’s population
Indirect taxes are to be levied at the same rate across the country

4. This was a result of the court case, McCulloch v. Maryland
Implied limitations:
The federal government may not tax state or local governments, and vice-versa
This was a result of the court case, McCulloch v. Maryland
Non-profit and Religious organizations are generally not taxed

5. Types of Taxes

6. INCOME TAXES: These are progressive taxes on individual incomes.
These are usually pay-roll taxes- taken from pay by employer
Businesses pay Corporate Income Taxes
Income taxes are the largest source of revenue for the national government!

8. EXCISE TAX: tax on goods manufactured and sold within the U.S.
Other Federal Taxes:
SOCIAL INSURANCE TAX:
- paid as a pay roll tax
- funds social insurance programs
- this is a regressive tax
EXCISE TAX: tax on goods manufactured and sold within the U.S.
CUSTOMS DUTIES (tariffs): a tax on imported goods; often considered a “protective” regulation

10. State Taxes: Sales Taxes Income taxes User Charges
Highway Tax on Gasoline

11. Local Taxes: Personal Property Taxes Property Transfer Tax
Licensing and User Charges
Meals Tax!!!
Income tax and sales taxes are not used in Henrico

12. The Government taxes for non-revenue purposes:
To regulate certain activities
To discourage certain activities
To protect American business

13. Different tax structures affect taxpayers differently and can be distinguished by whether the tax burden falls more heavily on those with higher or lower income levels.
A progressive tax takes a larger percentage of taxes from people in higher-income groups than from people in lower-income ones; the United States federal income tax is an example.
A proportional tax, also called a flat tax, is one in which the same tax rate is paid by people at all income levels. People who earn more pay more, but they pay the same percentage rate. Property tax is an example of a proportional tax.
A regressive tax applies in the same way to everyone, but the tax paid represents a larger share from lower-income groups than from higher-income groups. Sales tax is a regressive tax.

14. In this world nothing can be said to be certain, except death and taxes.