1. Chapter 16 Government Spends, Collects, and Owes

3. Functions of Government 1)Provides for Public Good -Nat’l Defense -Parks and the Arts -Combating Socially Undesirable Acts 2)Redistribution of Income -Social Programs (Social Security, Medicare) -Public Assistance (Welfare, Medicaid) 3)Regulating Economic Activity -Labor/Mgmt. -Environmental 4) Ensuring Economic Stability

4. Federal Government Spending

5. The Budget Budget Surplus – Take in more $ than is needed. Budget Deficit – Spend more $ than you have. Deficit Financing - Borrowing $ to balance the budget National Debt – Accumulation of overspending

6. Taxes Lifetime Earnings: 40 yrs @ $60,000/yr. = $2,400,000 @ 28% Income Tax = $672,000 or $16,800/yr. @ 40% All Taxes = $960,000 or $24,000/yr. Principles of Taxation 1)Benefits Received – Those who use it should support it. 2)Ability to Pay – Pay according to your ability

7. Forms of Taxation Proportional – Flat Tax Progressive - Tax payment increases more with increased earnings. Regressive – Tax % goes down as you make more

8. Living in Allen, Texas Avg Home = $206,000 Taxing Base = 2,060 Collin County.2450$ 505 Allen City.5570 $ 1,147 Allen ISD 1.5500 $ 3,193 CCCCD.086984 $ 180 $ 5,025 Rate/$100