1. What are Taxes? Why have Taxes? Funding Government Programs Allow governments to provide services and operate Taxes & the Constitution This is the first power granted to Congress but has limits Tax Bases & Tax Structures Tax Base: the income, property, good/service subject to a tax Structure: regressive progressive proportional Characteristics Of a Good Tax -simplicity -efficiency -certainty -equity Who Bears The Tax Burden? Supply and demand analysis shows that it is often the consumer who bears the burden

2. Federal Taxes Individual Income Taxes Corporate Income Taxes FICA Excise Taxes Estate Taxes Gift Taxes Import Taxes

3. Federal Spending Mandatory Spending Discretionary Spending $$ that must be spent like interest on the nat’l debt, and entitlement programs {Social Security, Medicare/Medicaid} Gov’t may choose like defense spending, education, research, technology, law enforcement

4. State and Local Taxes and Spending State Budgets Where Are State Taxes Spent State Tax Revenue Local Government Spending and Revenue