1. Taxation and Borrowing
Civics
Chapter 20 Section 1
Mr. Collins and Mrs. Kozlik
CE.13b,c

2. Government Spending Government has expenses
Government provides many services to the public that we wouldn’t have
Interstate highways
United States Postal Service
National Defense
Provides benefits to everyone at the same time

3. Ways Government Gets Money
Taxes
Borrowing
Fees (Park Fees)

4. 16th Amendment
Authorizes Congress to tax personal and business incomes

5. Effects of Taxation
Tax increases reduce the amount of money available for businesses and individuals to spend
Tax decreases increase the amount of money available for businesses and individuals to spend

6. Effects of Borrowing
The more money the government borrows the less there is available for businesses and individuals to borrow
The less money the government borrows the more there is available for businesses and individuals to borrow

7. Government Spending
Increased government spending increases demand which may increase employment and production
Decreased government spending reduces demand which may result in a slowing of the economy

8. Government Spending (cont.)
Increased government spending may result in _____ taxes
Higher is the answer
Decreased government spending may result in _____ taxes
Lower is the answer